Location Decisions in Business Management

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Questions and Answers

Why do location decisions arise?

Addition of new facilities
Depletion of basic inputs
Shift in markets
All of the above (correct)

Which of the following is NOT a reason for location decisions?

Growth in demand that cannot be satisfied by existing facilities
Depletion of basic inputs
Cost of doing business at a particular location
Political stability (correct)

What is the primary goal of the center of gravity method?

To minimize distribution costs

Which of the following is a key success factor for location decisions at the country level?

Availability of supplies (A) Signup and view all the answers

What is a key difference between location decisions for goods-producing and service/retail/professional businesses?

Service businesses are more concerned with revenue, while goods-producing businesses focus on costs (B) Signup and view all the answers

The load distance method helps evaluate candidate locations relative to demand points by measuring the total load-distance for each candidate.

True (A) Signup and view all the answers

What is the main purpose of the transportation model?

To find the optimal amount of goods shipped from supply points to demand points (D) Signup and view all the answers

What are the primary considerations when evaluating location alternatives using factor rating?

Identifying relevant factors, assigning weights based on importance, scoring location alternatives, and calculating weighted scores. Signup and view all the answers

Which of the following is NOT a step involved in the locational cost-volume-profit analysis?

Identifying demand points (D) Signup and view all the answers

Which of the following techniques is best suited for solving multi-facility location problems?

Transportation model (A) Signup and view all the answers

What are the key factors to consider when choosing a location for a service-oriented business?

Purchasing power of the customer base, service compatibility with local demographics, competition in the area, quality of the competition, uniqueness of the location, physical qualities, operating policies, and quality of management. Signup and view all the answers

Flashcards

Location Decisions

Strategic choices about where to place facilities, considering factors like cost, market access, and supply chain optimization.

Reasons for Location Decisions

Adding new facilities, increasing demand, relocating due to input shortages, market shifts, or cost advantages.

Country Decision

Choosing a nation for a facility, considering political stability, cultural fit, market proximity, labor availability and cost, supply chain efficiency, and currency risks.

Region/Community Decision

Selecting a specific region within a country. Factors include local corporate preferences, labor availability and rates, utility expenses, and government incentives.