ch 8

Place the following steps for making location decisions in the correct order.

1 decide on eval criteria 2 id important factors 3 develop locations alternatives 4 eval alternatives and make a decision

Put the steps of the locational cost-profit-volume analysis in the correct order.

1 determine the fixed and variable cost associated with each alt 2 plot the total cost lines for all alts on the same graph 3 determine which location has the lowest total cost (or highest profit) at the expected output levels

Place the following steps for factor rating in the correct order.

1 determine which factors are relevant 2 assign a weight to each factor 3 decide on a common scale for all factors 4 score each location alternative 5 multiply the factor weight by the factor score add the results for each alternative 6 choose the alternative that has the highest composite score

Which of the following statements about location planning is/are true?

Abundant energy supplies can be important for manufacturing companies. Transportation costs can be a major factor for manufacturing companies. Services often try to locate in close proximity to their market.

Which of the following statements about location options are true?

Adding new locations while keeping existing ones may draw demand from existing locations instead of increasing overall demand. Expansion costs are often less than those of other alternatives.

Which of the following are reasons companies may choose to locate manufacturing facilities in other countries?

Avoid taxes through transfer pricing rules Delay paying taxes on profits Low wage rates

Which of the following statements about location planning is not true?

Both manufacturing and service focus primarily on traffic patterns and competitor locations.

Which of the following are potential issues in managing global operations?

Bribery Corruption Differences in work ethics

True or false: All organizations attempt to identify the best location available, in making location decisions.

False

__________ in the areas of transportation, labor, and raw material are benefits of globalization.

Cost savings

Which of the following statements about service and retail locations are true?

Customer safety and security can be important factors. They are usually revenue-focused. They are usually found near the center of the markets they serve.

Which of the following is not a strategic implication of location decisions?

Impact availability of finished goods.

Which of the following are possible disadvantages of globalizing operations?

Import restriction Ethical concerns about labor practices Increased security costs

Which of the following is not a risk associated with globalizing operations?

Increased security at borders can slow shipments.

Which of the following statements about product plant strategy are true?

It can result in economies of scale, reducing costs. Entire products or product lines are produced at in separate plants.

Which of the following statements about a market area plant strategy are true?

It requires centralized coordination between all plants. Enables greater responsiveness to local needs. Individual plants produce most/all of a company's products for a specific area.

Which of the following statements about site selection are true?

Land, transportation, and zoning are the primary considerations in site selection. Customer service facilities could consider industrial parks as locations.

Which of the following are reasons companies may choose to not locate manufacturing facilities in other countries?

Longer transportation times Increased inventory

Which of the following is not a risk associated with globalizing operations?

Low labor productivity.

Which of the following are the three primary reasons companies locate near the source of raw materials?

Necessity, perishability, transportation costs

Which of the following is not an issue associated with managing global operations?

Need to operate using the local currency

Which are the four general plant strategies when a company has multiple manufacturing plants?

Product plant, market area plant, process plant, general-purpose plant

Which of the following statements regarding service location decisions is true?

Services tend to locate in high-traffic areas.

Which of the following are the main options generally considered by managers in location planning of existing companies?

Shut down one location and move to another. Add new locations while keeping existing ones. Do nothing. Expand existing facilities.

Identify the factors that affect location decisions while identifying a community.

Taxes Environmental regulations Pollution

Which of the following statements about global locations is not true?

The main reason for global locations is a decrease in labor costs.

What is often the reason that vendors locate near their major customers?

Transportation cost

Which of the following are disadvantages of globalizing operations?

Transportation costs Import restrictions Security costs

Which of the following are the assumptions for the locational cost-profit-volume analysis? (Check all that apply.)

Variable costs are linear for the range of output. Fixed costs are constant.

Which of the following statements about location decisions is not true?

Web-based business are just as dependent on location decisions as traditional businesses are.

Trade agreements and technology are ______ in globalization.

facilitating factors

Many communities try to attract new businesses because they are viewed as potential sources of _____. (Check all that apply.)

future tax revenues new job opportunities

Better serving existing customers by having a quicker response time when problems occur is a benefit of _______.

globalization

The increased dispersion of manufacturing and service operations around the world was brought about by _______.

globalization

Internet-based retail businesses such as Netflix are ______ location decisions than a distribution-based business such as Amazon.

much less dependent on

Factor rating is an approach that can be used to evaluate location alternatives. It includes both _____ and _____ inputs.

quantitative, qualitative

In the context of identifying a suitable site, land costs can be ______ to other site-related factors, such as room for future ______ .

secondary, expansion

Clustering refers to ______ types of businesses locating in the same area.

similar

Two key factors that have made globalization attractive to many organizations are _____ and _____. (Check all that apply.)

technological advances trade agreements

The importance of factors in location decisions will differ depending on ______.

the type of facility