Which statement best characterizes the objective of a typical search for location alternatives?

ch8Student: ___________________________________________________________________________1. Location decisions are basically one-time decisions usually made by new organizations.True False2. The fact that most types of firms are located in every section of the country suggests that in many cases,location decisions are not overly important; one location typically is as good as another.True False3. You can't make a mistake by locating where labor costs are low.True False4. Advanced communications has aided globalization.True False5. The first step in developing location alternatives is identifying important factors.True False6. An example of a regional factor in location planning is the location of our markets (either existing orpotential).True False7. A strategy that emphasizes convenience for the customers would probably select a single very large facility.True False8. For service organizations, the dominant factors in location analysis usually are market-related.True False9. Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.True False10. Labor laws are an important site-related factor.True False11. Web-based, retail businesses should be located near the customer to reduce their long distance phonecharges.True False12. For service and retail stores, a prime factor in location analysis is customer access.True False13. Retail businesses generally prefer locations that are not near other retailers, as this reduces theircompetition.True False14. Technology has made communication with global operations as easy as local communication.True False15. Factor rating is limited to quantitative information concerning location decisions.True False16. As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives underconsideration when the composite scores are below the minimum threshold value.True False17. The lower cost of foreign labor is often offset by lower levels of productivity.True False18. The center of gravity method is a location planning technique that determines a composite score fromweighted factor evaluation.True False19. The center of gravity method is useful in location planning for the location of a distribution center.True False20. The center of gravity method of location planning is accurate only when the quantities to be shipped to eachlocation are equal.True False21. Location decisions are closely tied to an organization's strategies.True False22. A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.True False23. One of the reasons for the importance of location decisions is its strategic importance to the supply chains.True False24. Nearness to raw materials would be most important to a A. grocery storeB. tax preparation serviceC. manufacturing companyD. post officeE. hospital25. A one-hour photo processing machine in a Wal-Mart store is an example of a _________.A. micro-factoryB. downsize strategyC. diversified strategyD. lean production systemE. falling price strategy26. Which statement best characterizes a typical search for location alternatives?A. identify the best location choiceB. minimize cost consequencesC. maximize associated profitsD. locate near marketsE. identify acceptable locations27. Which of the following is not a location option that management can consider in location planning?A. expand an existing facilityB. add a new locationC. relocate from one location to anotherD. do nothingE. All are possible options.28. Which of the following is the last step in the procedure for making location decisions?A. determine the evaluation criteriaB. identify important factorsC. develop location alternativesD. evaluate alternatives and make a selectionE. request input regarding alternatives29. When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is___________.A. Linear programmingB. Consumer surveysC. Factor ratingD. Transportation modelsE. Center of gravity methods30. The center of gravity method is used to _______ travel time, distance and costs.A. NormalizeB. EliminateC. AverageD. MinimizeE. Document31. In location planning, the location of raw materials, the location of markets, and labor factors are:A. regional factorsB. community factorsC. site-related factorsD. national factorsE. minor considerations32. Software systems known as GIS help in location analysis. The initials GIS stand for _______.A. Graphic Interface SystemsB. Global Integrated SoftwareC. Graded Information SystemsD. Geo Intensive SoftwareE. Geographical Information System33. Facilities, personnel and operations that are located around the world are called:A. non-domesticB. diversified operationsC. globalizationD. worldwide presenceE. virtual organization34. Some communities offer financial and other incentives to ______ new businesses.A. TaxB. AttractC. MarginalizeD. IncorporateE. Zone35. Location options don't usually include:A. expansionB. a contractC. adding new facilitiesD. movingE. doing nothing36. Cultural differences, Customer preferences, Labor and Resources are factors relating to:A. Regional choicesB. Site selectionC. ZoningD. Product designE. Foreign locations37. The method for evaluating location alternatives which uses their total cost curves is:A. cost-volume analysisB. transportation model analysisC. factor rating analysisD. linear regression analysisE. MODI analysis38. The method for evaluating location alternatives which minimizes shipping costs between multiple sendingand receiving locations is:A. cost-volume analysisB. transportation model analysisC. factor rating analysisD. linear regression analysisE. MODI analysis39. The method for evaluating location alternatives which uses their composite (weighted-average) scores is:A. cost-volume analysisB. transportation model analysisC. factor rating analysisD. linear regression analysisE. MODI analysis40. An approach to location analysis that can include both qualitative and quantitative considerations is:A. location cost-volumeB. factor ratingC. transportation modelD. expected value (net present value)E. financial analysis41. A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in thedecision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weightof .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are forAkron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and aminimum acceptable composite score of 75, we can say that the manager should:A. be indifferent between these locationsB. choose AkronC. choose BostonD. reject both locationsE. build a plant in both cities42. A manager must decide between two location alternatives, Boston and Chicago. Boston would have annualfixed costs of $70,000, transportation costs of $60 per unit, and labor and material costs of $200 per unit.Chicago would have annual fixed costs of $90,000, transportation costs of $40 per unit, and labor and materialcosts of $170 per unit. Revenue will be $300 per unit.(A) Which alternative would yield the higher profit for an annual demand of 3,000 units?(B) Would the two locations yield the same profit at a certain volume? If so, at what volume would that be?43. A firm is trying to decide between two location alternatives, Albany and Baltimore. Albany would result inannual fixed costs of $60,000, labor costs of $7 per unit, material costs of $10 per unit, transportation costs of$15 per unit, and revenue per unit of $50. Baltimore would have annual fixed costs of $80,000, labor costs of $6per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48.(A) At an annual volume of 9,000, which would yield the higher profit?(B) At what annual volume would management be indifferent between the two alternatives in terms of annualprofits?44. Given the information below on scores of three location alternatives, which alternative would yourecommend? Why?45. Determine the center of gravity location for the destinations and shipping quantities shown below:46. Determine the optimum location for a distribution center to serve the following locations. Shipments to eachlocation will be approximately equal.The Skulls, a student social organization, has two different locations under consideration for constructing a newchapter house. Skull's president, a POM student, estimates that due to differing land costs, utility rates, etc.,both fixed and variable costs would be different for each of the proposed sites, as follows:47. What would be total annual costs for the Alpha Ave. location with twenty persons living there?A. $5,400B. $4,000C. $5,000D. $7,000E. $9,00048. What would be total annual costs for either location at the point of indifference?A. $13,000B. $13,350C. $9,000D. $17,000E. $19,20049. If it is estimated that thirty persons will be living in this new chapter house, which location should the Skullsselect?A. Alpha Ave.B. Beta Blvd.C. either Alpha Ave. or Beta Blvd.D. reject both Alpha Ave. nor Beta Blvd.E. become a virtual organization50. If it is estimated that thirty persons will be living in this new chapter house, what would be the Skull'sannual cost savings by selecting the less costly location, rather than the more costly?A. $0B. $1,500C. $200D. $150E. $35051. What are total costs for site A for a quantity of 5,000 units per year?52. What are total costs for site B for a quantity of 5,000 units per year?53. What are total costs for site C for a quantity of 5,000 units per year?54. For what quantity would you be indifferent between selecting site A or site B?55. For what quantity would you be indifferent between selecting site B or site C?56. For what range of output would you prefer site A?57. For what range of output would you prefer site B?58. For what range of output would you prefer site C?59. Which site would you prefer for a quantity of 20,000 units per year?60. For the preferred site for 20,000 units per year, what would be your total costs?61. For the preferred site for 20,000 units per year, what would be your cost savings compared to each of theother two sites?A manufacturing firm is considering two locations for a plant to produce a new product. The two locationshave fixed and variable costs as follows:62. At what annual output would the company be indifferent between the two locations?A. 60,000 unitsB. 15,000 unitsC. 10,000 unitsD. 20,000 unitsE. 4,000 units63. What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?A. $280,000B. $140,000C. $220,000D. $300,000E. $156,00064. What would be the total annual costs at the point of indifference?A. $300,000B. $240,000C. $380,000D. $220,000E. $760,00065. If annual demand is estimated to be 20,000 units, which location should the company select?A. AtlantaB. PhoenixC. either Atlanta or PhoenixD. reject both Atlanta and PhoenixE. build at both locations66. If the annual demand will be 20,000 units, what would be the cost advantage of the better location?A. $20,000B. $460,000C. $480,000D. $80,000E. $60,000A location analysis has been narrowed down to three locations. The critical factors, their weights, and theratings for each location are shown below:67. What is the composite score for location A?A. 76B. 75C. 78D. 74E. 76.3368. What is the composite score for location B?A. 76B. 75C. 78D. 74E. 76.3369. What is the composite score for location C?A. 76B. 75C. 78D. 74E. 76.3370. If the selection criteria is to be the greatest composite score, management should choose:A. location AB. location BC. location CD. either B or CE. to reject all locations71. If the decisions rule is to select the location with the greatest composite score exceeding 80, managementshould choose:A. location AB. location BC. location CD. either B or CE. to reject all locationsA clothing manufacturer produces clothing in five locations in the U. S. In a move to vertical integration, thecompany is planning a new fabric production plant that will supply fabric to all five clothing plants. Theclothing plants have been located on a coordinate system as follows:72. If the amount of fabric shipped to each plant is equal, what is the optimal location for the fabric plant?A. 5, 5B. 6, 4C. 4, 6D. 6, 2E. 5, 473. Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C,300 units; plant D, 300 units; and plant E, 200 units. What is the optimal location for the fabric plant?A. 6.2, 3.0B. 6.0, 4.0C. 6.5, 5.3D. 5.6, 4.4E. 5.0, 3.0A hardware distributor has regional warehouses at the locations shown below. The company wants to locate anew central distribution center to serve this warehouse network.74. If weekly shipments to each warehouse will be approximately equal, what is the optimal location for thedistribution center?A. 5, 5B. 5, 4C. 4, 5D. 5, 6E. 6, 575. Weekly shipments to each warehouse will be: WH1, 100; WH2, 150; WH3, 120; WH4, 150; and WH5, 120.What is the optimal location of the distribution center?A. 5.1, 4.2B. 5.2, 4.0C. 5.1, 5.1D. 4.2, 5.1E. 4.9, 5.276. Which of the following circumstances would be least likely to lead to a need for a new location?A. Shifting of markets.B. Depletion of basic inputs.C. Growth in demand that is leading to greater utilization of existing capacity.D. The need to expand into new markets.E. The opportunity to take advantage of globalization trends.77. Which of the following is least important as a consideration for a firm at the beginning of a supply chain?A. Access to end consumersB. Access to resourcesC. Proximity to customersD. Access to transportation infrastructureE. Access to productive labor78. Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would itstotal cost be at a monthly volume of 250 units?A. $105,200B. $102,500C. $100,250D. $100,520E. $105,50079. Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would itstotal cost be at a monthly volume of 550 units?A. $105,200B. $102,500C. $100,250D. $100,520E. $105,50080. Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location choice Jhas monthly fixed costs of $150,000 and per-unit variable costs of $9. At what volume would these locationshave equal total costs?A. 30,000 unitsB. 25,000 unitsC. 40,000 unitsD. 50,000 unitsE. 60,000 unitsch8 Key1. Location decisions are basically one-time decisions usually made by new organizations.FALSEMost organizations face location decisions over time.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-01 Identify some of the main reasons organizations need to make location decisions.Stevenson - Chapter 08 #1Topic Area: The Nature of Location Decisions2. The fact that most types of firms are located in every section of the country suggests that in many cases,location decisions are not overly important; one location typically is as good as another.FALSEMany factors make locations relatively more or less attractive.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-02 Explain why location decisions are important.Stevenson - Chapter 08 #2Topic Area: The Nature of Location Decisions3. You can't make a mistake by locating where labor costs are low.FALSELabor costs are only occasionally a primary consideration in location decisions.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #3Topic Area: Identifying a Country, Region, Community and Site4. Advanced communications has aided globalization.TRUEGlobalization has been helped along by advances in communication technology.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #4Topic Area: Global Locations5. The first step in developing location alternatives is identifying important factors.FALSEThe first step is deciding on the criteria for evaluating the alternatives.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 08-05 Outline the decision process for making these kinds of decisions.Stevenson - Chapter 08 #5Topic Area: General Procedures for Making Location Decisions6. An example of a regional factor in location planning is the location of our markets (either existing orpotential).TRUEMarket location is a regional factor.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #6Topic Area: Identifying a Country, Region, Community and Site7. A strategy that emphasizes convenience for the customers would probably select a single very large facility.FALSEConvenience for customers would tend to necessitate small, dispersed facilities.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #7Topic Area: Service and Retail Locations8. For service organizations, the dominant factors in location analysis usually are market-related.TRUEMarket considerations are dominant in service location decisions.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #8Topic Area: Service and Retail Locations9. Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.FALSEGPS uses satellite transmissions for its grid coordinates.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #9Topic Area: Identifying a Country, Region, Community and Site10. Labor laws are an important site-related factor.FALSELabor laws are country- or region-related factors.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #10Topic Area: Identifying a Country, Region, Community and Site11. Web-based, retail businesses should be located near the customer to reduce their long distance phonecharges.FALSECentralized locations are appropriate for web-based retail businesses.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #11Topic Area: Service and Retail Locations12. For service and retail stores, a prime factor in location analysis is customer access.TRUECustomer access is a critical consideration in services and retailing.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #12Topic Area: Service and Retail Locations13. Retail businesses generally prefer locations that are not near other retailers, as this reduces theircompetition.FALSERetailers prefer to locate near customers, which means they often locate near one another.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #13Topic Area: Service and Retail Locations14. Technology has made communication with global operations as easy as local communication.FALSEWhile technology has made some facets of global operations easier, other facets are still difficult.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-03 Discuss the options that are available for location decisions.Stevenson - Chapter 08 #14Topic Area: Global Locations15. Factor rating is limited to quantitative information concerning location decisions.FALSEQualitative considerations can be brought into factor rating approaches.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: HardLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #15Topic Area: Evaluating Location Alternatives16. As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives underconsideration when the composite scores are below the minimum threshold value.TRUEIf a minimum score is necessary, no alternative may be suitable.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #16Topic Area: Evaluating Location Alternatives17. The lower cost of foreign labor is often offset by lower levels of productivity.TRUEForeign labor often is cheaper but less productive than domestic labor.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #17Topic Area: Identifying a Country, Region, Community and Site18. The center of gravity method is a location planning technique that determines a composite score fromweighted factor evaluation.FALSEFactor scoring determines a composite score from weighted factor evaluation.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #18Topic Area: Evaluating Location Alternatives19. The center of gravity method is useful in location planning for the location of a distribution center.TRUEIt optimizes the location for a distribution center.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #19Topic Area: Evaluating Location Alternatives20. The center of gravity method of location planning is accurate only when the quantities to be shipped to eachlocation are equal.FALSECenter of gravity approaches factor in differences in quantities being shipped.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #20Topic Area: Evaluating Location Alternatives21. Location decisions are closely tied to an organization's strategies.TRUEAn organization's strategy should inform location decisions.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-01 Identify some of the main reasons organizations need to make location decisions.Stevenson - Chapter 08 #21Topic Area: The Nature of Location Decisions22. A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.TRUEMicro-factories serve narrow slices of a market very efficiently.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-03 Discuss the options that are available for location decisions.Stevenson - Chapter 08 #22Topic Area: Identifying a Country, Region, Community and Site23. One of the reasons for the importance of location decisions is its strategic importance to the supply chains.TRUEA firm's supply chain performance is strongly affected by location decisions.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-02 Explain why location decisions are important.Stevenson - Chapter 08 #23Topic Area: The Nature of Location Decisions24. Nearness to raw materials would be most important to a A. grocery storeB. tax preparation serviceC. manufacturing companyD. post officeE. hospitalManufacturers especially value proximity to raw materials.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #24Topic Area: Identifying a Country, Region, Community and Site25. A one-hour photo processing machine in a Wal-Mart store is an example of a _________.A. micro-factoryB. downsize strategyC. diversified strategyD. lean production systemE. falling price strategyA micro-factory is a very efficient means of serving a small slice of a broad market.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-03 Discuss the options that are available for location decisions.Stevenson - Chapter 08 #25Topic Area: Identifying a Country, Region, Community and Site26. Which statement best characterizes a typical search for location alternatives?A. identify the best location choiceB. minimize cost consequencesC. maximize associated profitsD. locate near marketsE. identify acceptable locationsFinding alternatives requires that we find which alternatives might be suitable and which might not.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-05 Outline the decision process for making these kinds of decisions.Stevenson - Chapter 08 #26Topic Area: General Procedures for Making Location Decisions27. Which of the following is not a location option that management can consider in location planning?A. expand an existing facilityB. add a new locationC. relocate from one location to anotherD. do nothingE. All are possible options.All of these should or might be considered.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-03 Discuss the options that are available for location decisions.Stevenson - Chapter 08 #27Topic Area: The Nature of Location Decisions28. Which of the following is the last step in the procedure for making location decisions?A. determine the evaluation criteriaB. identify important factorsC. develop location alternativesD. evaluate alternatives and make a selectionE. request input regarding alternativesWhen all alternatives have been evaluated it is time to make a decision.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 08-05 Outline the decision process for making these kinds of decisions.Stevenson - Chapter 08 #28Topic Area: General Procedures for Making Location Decisions29. When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is___________.A. Linear programmingB. Consumer surveysC. Factor ratingD. Transportation modelsE. Center of gravity methodsFactor rating approaches can incorporate both quantitative and qualitative considerations.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #29Topic Area: Evaluating Location Alternatives30. The center of gravity method is used to _______ travel time, distance and costs.A. NormalizeB. EliminateC. AverageD. MinimizeE. DocumentThe center of gravity method minimizes travel time, distance and costs.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-06 Use the techniques presented to solve typical problems.Stevenson - Chapter 08 #30Topic Area: Evaluating Location Alternatives31. In location planning, the location of raw materials, the location of markets, and labor factors are:A. regional factorsB. community factorsC. site-related factorsD. national factorsE. minor considerationsThese are regional factors.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-04 Give examples of the major factors that affect location decisions.Stevenson - Chapter 08 #31Topic Area: Identifying a Country, Region, Community and Site32. Software systems known as GIS help in location analysis. The initials GIS stand for _______.A. Graphic Interface SystemsB. Global Integrated SoftwareC. Graded Information SystemsD. Geo Intensive SoftwareE. Geographical Information SystemGIS stands for Geographical Information System.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 08-05 Outline the decision process for making these kinds of decisions.Stevenson - Chapter 08 #32Topic Area: Identifying a Country, Region, Community and Site