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Exam 8: Location Planning and Analysis

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Question 1

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A location analysis has been narrowed down to two locations, Akron and Boston.The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10.The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively.Given this information and a minimum acceptable composite score of 75, we can say that the manager should:

A) be indifferent between these locations
B) choose Akron
C) choose Boston
D) reject both locations
E) build a plant in both cities

F) C) and E)
G) A) and C)

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Question 2

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Advanced communications has aided globalization.

A) True
B) False

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Question 3

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If it is estimated that thirty persons will be living in this new chapter house, which location should the Skulls select?

A manager must decide between two location alternatives, Boston and Chicago.Boston would have annual fixed 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 material costs 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?

The center of gravity method is a location planning technique that determines a composite score from weighted factor evaluation.

You can't make a mistake by locating where labor costs are low.

If it is estimated that thirty persons will be living in this new chapter house, what would be the Skull's annual cost savings by selecting the less costly location, rather than the more costly?

One of the reasons for the importance of location decisions is its strategic importance to the supply chains.

If the amount of fabric shipped to each plant is equal, what is the optimal location for the fabric plant?

An example of a regional factor in location planning is the location of our markets (either existing or potential).

A strategy that emphasizes convenience for the customers would probably select a single very large facility.

Determine the optimum location for a distribution center to serve the following locations.Shipments to each location will be approximately equal.

Location decisions are closely tied to an organization's strategies.

The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal.

Which of the following is the last step in the procedure for making location decisions?

Nearness to raw materials would be most important to a .....

Which of the following is not a location option that management can consider in location planning?

The method for evaluating location alternatives which uses their total cost curves is:

If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution center?

As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives under consideration when the composite scores are below the minimum threshold value.