Operations Management Chapter 8 – Flashcards
Unlock all answers in this set
Unlock answersquestion
Location decisions are basically one-time decisions usually made by new organizations.
answer
FALSE Most organizations face location decisions over time.
question
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.
answer
FALSE Many factors make locations relatively more or less attractive.
question
You can't make a mistake by locating where labor costs are low.
answer
FALSE Labor costs are only occasionally a primary consideration in location decisions.
question
Advanced communications has aided globalization.
answer
TRUE Globalization has been helped along by advances in communication technology.
question
The first step in developing location alternatives is identifying important factors.
answer
FALSE The first step is deciding on the criteria for evaluating the alternatives.
question
An example of a regional factor in location planning is the location of our markets (either existing or potential).
answer
TRUE Market location is a regional factor.
question
A strategy that emphasizes convenience for the customers would probably select a single very large facility.
answer
FALSE Convenience for customers would tend to necessitate small, dispersed facilities.
question
For service organizations, the dominant factors in location analysis usually are market-related.
answer
TRUE Market considerations are dominant in service location decisions.
question
Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.
answer
FALSE GPS uses satellite transmissions for its grid coordinates.
question
Labor laws are an important site-related factor.
answer
FALSE Labor laws are country- or region-related factors.
question
Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.
answer
FALSE Centralized locations are appropriate for web-based retail businesses.
question
For service and retail stores, a prime factor in location analysis is customer access.
answer
TRUE Customer access is a critical consideration in services and retailing.
question
Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.
answer
FALSE Retailers prefer to locate near customers, which means they often locate near one another.
question
Technology has made communication with global operations as easy as local communication.
answer
FALSE While technology has made some facets of global operations easier, other facets are still difficult.
question
Factor rating is limited to quantitative information concerning location decisions.
answer
FALSE Qualitative considerations can be brought into factor rating approaches.
question
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.
answer
TRUE If a minimum score is necessary, no alternative may be suitable.
question
The lower cost of foreign labor is often offset by lower levels of productivity.
answer
TRUE Foreign labor often is cheaper but less productive than domestic labor.
question
The center of gravity method is a location planning technique that determines a composite score from weighted factor evaluation.
answer
FALSE Factor scoring determines a composite score from weighted factor evaluation.
question
The center of gravity method is useful in location planning for the location of a distribution center.
answer
TRUE It optimizes the location for a distribution center.
question
The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal.
answer
FALSE Center of gravity approaches factor in differences in quantities being shipped.
question
Location decisions are closely tied to an organization's strategies.
answer
TRUE An organization's strategy should inform location decisions.
question
A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.
answer
TRUE Micro-factories serve narrow slices of a market very efficiently.
question
One of the reasons for the importance of location decisions is its strategic importance to the supply chains.
answer
TRUE A firm's supply chain performance is strongly affected by location decisions.
question
Nearness to raw materials would be most important to a A. grocery store B. tax preparation service C. manufacturing company D. post office E. hospital
answer
C. manufacturing company Manufacturers especially value proximity to raw materials.
question
A one-hour photo processing machine in a Wal-Mart store is an example of a _________. A. micro-factory B. downsize strategy C. diversified strategy D. lean production system E. falling price strategy
answer
A. micro-factory A micro-factory is a very efficient means of serving a small slice of a broad market.
question
Which statement best characterizes a typical search for location alternatives? A. identify the best location choice B. minimize cost consequences C. maximize associated profits D. locate near markets E. identify acceptable locations
answer
E. identify acceptable locations Finding alternatives requires that we find which alternatives might be suitable and which might not.
question
Which of the following is not a location option that management can consider in location planning? A. expand an existing facility B. add a new location C. relocate from one location to another D. do nothing E. All are possible options.
answer
E. All are possible options. All of these should or might be considered.
question
Which of the following is the last step in the procedure for making location decisions? A. determine the evaluation criteria B. identify important factors C. develop location alternatives D. evaluate alternatives and make a selection E. request input regarding alternatives
answer
D. evaluate alternatives and make a selection When all alternatives have been evaluated it is time to make a decision.
question
When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is ___________. A. Linear programming B. Consumer surveys C. Factor rating D. Transportation models E. Center of gravity methods
answer
C. Factor rating Factor rating approaches can incorporate both quantitative and qualitative considerations.
question
The center of gravity method is used to _______ travel time, distance and costs. A. Normalize B. Eliminate C. Average D. Minimize E. Document
answer
D. Minimize The center of gravity method minimizes travel time, distance and costs.
question
In location planning, the location of raw materials, the location of markets, and labor factors are: A. regional factors B. community factors C. site-related factors D. national factors E. minor considerations
answer
A. regional factors These are regional factors.
question
Software systems known as GIS help in location analysis. The initials GIS stand for _______. A. Graphic Interface Systems B. Global Integrated Software C. Graded Information Systems D. Geo Intensive Software E. Geographical Information System
answer
E. Geographical Information System GIS stands for Geographical Information System.
question
Facilities, personnel and operations that are located around the world are called: A. non-domestic B. diversified operations C. globalization D. worldwide presence E. virtual organization
answer
C. globalization Globalization involves facilities, personnel and operations that are located around the world.
question
Some communities offer financial and other incentives to ______ new businesses. A. Tax B. Attract C. Marginalize D. Incorporate E. Zone
answer
B. Attract Businesses often weigh such incentives in their location decision processes.
question
Location options don't usually include: A. expansion B. a contract C. adding new facilities D. moving E. doing nothing
answer
B. a contract A contract has little to do with location options.
question
Cultural differences, Customer preferences, Labor and Resources are factors relating to: A. Regional choices B. Site selection C. Zoning D. Product design E. Foreign locations
answer
E. Foreign locations Foreign locations concerns with respect to these issues.
question
The method for evaluating location alternatives which uses their total cost curves is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis
answer
A. cost-volume analysis Cost-volume analysis is based on total cost curves.
question
The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis
answer
B. transportation model analysis Transportation model analysis minimizes shipping costs between multiple sending and receiving locations.
question
The method for evaluating location alternatives which uses their composite (weighted-average) scores is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis
answer
C. factor rating analysis Factor rating analysis evaluates by using their composite (weighted-average) scores.
question
An approach to location analysis that can include both qualitative and quantitative considerations is: A. location cost-volume B. factor rating C. transportation model D. expected value (net present value) E. financial analysis
answer
B. factor rating Factor rating can include both qualitative and quantitative considerations.
question
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.
answer
C. Growth in demand that is leading to greater utilization of existing capacity. Greater utilization does not necessarily mean that new capacity is needed.
question
Which of the following is least important as a consideration for a firm at the beginning of a supply chain? A. Access to end consumers B. Access to resources C. Proximity to customers D. Access to transportation infrastructure E. Access to productive labor
answer
A. Access to end consumers Firms at the beginning of the supply chain are far-removed from final consumers.
