30 Questions
What is a reason for a location decision to arise in an organization?
A shift in markets
What is an objective of location decisions?
To maximize profit potential and customer service
Why are location decisions strategically important?
They impact competitive advantage and investment requirements
What is a consideration in finding an acceptable location?
Accessibility and consumer demographics
What type of location decision is based on finding a number of acceptable locations?
Multiple location decision
What is a key aspect of supply chain management in location decisions?
Centralized vs. decentralized configuration
What is one of the options available to companies in location planning?
Add new locations while retaining existing facilities
What is one of the facilitating factors that have contributed to the attractiveness of globalization?
Advances in communication and information technology
What is one of the benefits of globalization for organizations?
Access to new markets
What is one of the disadvantages of global location?
Increased security costs
What is one of the risk factors that organizations should consider when locating globally?
Economic instability in the host country
What is the purpose of locational cost-profit-volume analysis?
To evaluate location choices in economic terms
What is the primary goal of the Center of Gravity Method in locating a distribution center?
To minimize transportation costs
How are the coordinates of the center of gravity calculated when quantities to be shipped to every location are equal?
By finding the average of the x-coordinates and the average of the y-coordinates
What is the assumption made about the quantity to be shipped to each destination in the Center of Gravity Method?
The quantity is fixed and known
What is the purpose of overlaying a coordinate system on the map in the Center of Gravity Method?
To determine the relative locations of each destination
Which of the following factors is given the highest weight in the weighted scores calculation?
Rental costs
What is the total weighted score for Alt 1 in the given example?
70.6
What is the formula to find the weighted average of the x-coordinates in the center of gravity method?
$\frac{\sum x_i Q_i}{\sum Q_i}$
What is the purpose of the center of gravity method in location decisions?
To find the optimal location by finding the weighted average of the coordinates
In the example given, what is the quantity to be shipped to destination D1?
800
What are the coordinates of the center of gravity in the given example?
(3.05, 3.7)
What is the formula to find the weighted average of the y-coordinates in the center of gravity method?
$\frac{\sum y_i Q_i}{\sum Q_i}$
What is the condition required for the center of gravity method to be applicable?
Quantities to be shipped to every location are unequal
What is the formula to calculate the total cost for each alternative location?
Total Cost = FC + v Q
What is the purpose of a locational cost-profit-volume analysis?
To determine the location that will have the lowest total cost for the expected level of output
What is the range of units for which location B is superior?
Up to 4,999 units
What is the fixed cost per year for location A?
$250,000
What is the variable cost per unit for location C?
$20
What determines the location that will have the lowest total cost for the expected level of output?
Both fixed and variable costs
Choose the right location for your business! Test your knowledge on location planning and analysis, including the need for location decisions and reasons for adding new facilities.
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