Location Planning and Analysis
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Questions and Answers

What is a reason for a location decision to arise in an organization?

  • A decrease in demand
  • A change in management
  • A shift in markets (correct)
  • A decrease in operating costs

    • What is an objective of location decisions?

  • To maximize profit potential and customer service (correct)
  • To minimize investment requirements
  • To reduce supply chain management issues
  • To relocate due to depletion of basic inputs

    • Why are location decisions strategically important?

  • They are not tied to an organization's strategies
  • They represent a short-term commitment of resources
  • They impact competitive advantage and investment requirements (correct)
  • They affect operating costs only

    • What is a consideration in finding an acceptable location?

    <p>Accessibility and consumer demographics</p> Signup and view all the answers

    What type of location decision is based on finding a number of acceptable locations?

    <p>Multiple location decision</p> Signup and view all the answers

    What is a key aspect of supply chain management in location decisions?

    <p>Centralized vs. decentralized configuration</p> Signup and view all the answers

    What is one of the options available to companies in location planning?

    <p>Add new locations while retaining existing facilities</p> Signup and view all the answers

    What is one of the facilitating factors that have contributed to the attractiveness of globalization?

    <p>Advances in communication and information technology</p> Signup and view all the answers

    What is one of the benefits of globalization for organizations?

    <p>Access to new markets</p> Signup and view all the answers

    What is one of the disadvantages of global location?

    <p>Increased security costs</p> Signup and view all the answers

    What is one of the risk factors that organizations should consider when locating globally?

    <p>Economic instability in the host country</p> Signup and view all the answers

    What is the purpose of locational cost-profit-volume analysis?

    <p>To evaluate location choices in economic terms</p> Signup and view all the answers

    What is the primary goal of the Center of Gravity Method in locating a distribution center?

    <p>To minimize transportation costs</p> Signup and view all the answers

    How are the coordinates of the center of gravity calculated when quantities to be shipped to every location are equal?

    <p>By finding the average of the x-coordinates and the average of the y-coordinates</p> Signup and view all the answers

    What is the assumption made about the quantity to be shipped to each destination in the Center of Gravity Method?

    <p>The quantity is fixed and known</p> Signup and view all the answers

    What is the purpose of overlaying a coordinate system on the map in the Center of Gravity Method?

    <p>To determine the relative locations of each destination</p> Signup and view all the answers

    Which of the following factors is given the highest weight in the weighted scores calculation?

    <p>Rental costs</p> Signup and view all the answers

    What is the total weighted score for Alt 1 in the given example?

    <p>70.6</p> Signup and view all the answers

    What is the formula to find the weighted average of the x-coordinates in the center of gravity method?

    <p>$\frac{\sum x_i Q_i}{\sum Q_i}$</p> Signup and view all the answers

    What is the purpose of the center of gravity method in location decisions?

    <p>To find the optimal location by finding the weighted average of the coordinates</p> Signup and view all the answers

    In the example given, what is the quantity to be shipped to destination D1?

    <p>800</p> Signup and view all the answers

    What are the coordinates of the center of gravity in the given example?

    <p>(3.05, 3.7)</p> Signup and view all the answers

    What is the formula to find the weighted average of the y-coordinates in the center of gravity method?

    <p>$\frac{\sum y_i Q_i}{\sum Q_i}$</p> Signup and view all the answers

    What is the condition required for the center of gravity method to be applicable?

    <p>Quantities to be shipped to every location are unequal</p> Signup and view all the answers

    What is the formula to calculate the total cost for each alternative location?

    <p>Total Cost = FC + v  Q</p> Signup and view all the answers

    What is the purpose of a locational cost-profit-volume analysis?

    <p>To determine the location that will have the lowest total cost for the expected level of output</p> Signup and view all the answers

    What is the range of units for which location B is superior?

    <p>Up to 4,999 units</p> Signup and view all the answers

    What is the fixed cost per year for location A?

    <p>$250,000</p> Signup and view all the answers

    What is the variable cost per unit for location C?

    <p>$20</p> Signup and view all the answers

    What determines the location that will have the lowest total cost for the expected level of output?

    <p>Both fixed and variable costs</p> Signup and view all the answers

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