ISDS - CH.8

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1. 
Industrial location analysis typically attempts to
a. reduce costs
b. maximize sales
c. focus more on human resources
d. be environmentally friendly
 
A
 
2. 
Service location decisions typically attempt to
a. minimize costs
b. consider global implications
c. decrease labor costs
d. be environmentally friendly
e. none of the above
 
E
 
3. 
A location decision for an appliance manufacturer would tend to have a(an)
a. cost focus
b. labor focus
c. revenue focus
d. environmental focus
e. education focus
 
A
 
4. 
A location decision for a traditional department store (Macy's) would tend to have a(n)
a. cost focus
b. labor focus
c. revenue focus
d. environmental focus
 
C
 
5. 
In location planning, environmental regulations, cost and availability of utilities, and taxes are
a. global factors
b. country factors
c. regional/community factors
d. site-related factors
e. none of the above
 
C
 
6. 
Which of the following is usually not one of the top considerations in choosing a manufacturing
location?
a. availability of labor and labor productivity
b. exchange rates
c. attitude of governmental units
d. zoning regulations
e. entertainment opportunities
 
D
 
7. 
When making a location decision at the country level, which of these would be considered?
a. corporate desires
b. land/construction costs
c. air, rail, highway, waterway systems
d. zoning restrictions
e. location of markets
 
E
 
8. 
Which of these factors would be considered when making a location decision at the
region/community level?
a. government rules, attitudes, stability, incentives
b. cultural and economic issues
c. zoning restrictions
d. environmental impact issues
e. proximity to raw materials and customers
 
E
 
9. 
When making a location decision at the region/community level, which of these would be
considered?
a. government rules, attitudes, stability, incentives
b. cultural and economic issues
c. cost and availability of utilities
d. zoning restrictions
e. air, rail, highway, waterway systems
 
C
 
10. 
Which of these factors would be considered when making a location decision at the site level?
a. government rules, attitudes, stability, incentives
b. cultural and economic issues
c. zoning regulations
d. cost and availability of utilities
e. proximity to raw materials and customers
 
C
 
11. 
Tangible costs include which of the following?
a. climatic conditions
b. availability of public transportation
c. taxes
d. quality and attitude of prospective employees
e. zoning regulations
 
C
 
12. 
Intangible costs include which of the following?
a. quality of prospective employees
b. quality of education
c. availability of public transportation
d. all of the above
 
D
 
13. 
Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in
which of the following location decision methods?
a. transportation method
b. locational break-even analysis
c. center-of-gravity method
d. simulation
e. factor rating method
 
E
 
14. 
Which of the following methods best considers intangible costs related to a location decision?
a. crossover methods
b. locational break-even analysis
c. factor rating analysis
d. the transportation method
e. the assignment method
 
C
 
15. 
Evaluating location alternatives by comparing their composite (weighted-average) scores involves
a. factor rating analysis
b. cost-volume analysis
c. transportation model analysis
d. linear regression analysis
e. crossover analysis
 
A
 
16. 
A clothing chain is considering two different locations for a new retail outlet. They have identified
the four factors listed in the following table as the basis for evaluation, and have assigned weights
as shown on the left. The manager has rated each location on each factor, on a 100-point basis, as
shown on the right.
Factor Factor Description Weight Barclay Chester
1 Average community income 0.40 30 20
2 Community growth potential 0.25 40 30
3 Availability of public transportation 0.15 20 20
4 Labor cost 0.20 10 30
What is the score for Barclay?
a. 10.00
b. 24.50
c. 25.75
d. 27.00
e. 100.00
 
D
 
17. 
An approach to location analysis that includes both qualitative and quantitative considerations is
a. locational cost-volume
b. factor rating
c. transportation model
d. assignment method
e. make or buy analysis
 
B
 
18. 
A full-service restaurant is considering opening a new facility in a specific city. The table below
shows its ratings of four factors at each of two potential sites.
Factor Weight Gary Mall Belt Line
Affluence of local population 0.20 30 30
Traffic flow 0.40 50 20
Parking availability 0.20 30 40
Growth potential 0.20 10 30
The score for Gary Mall is _____ and the score for Belt Line is ______.
a. 120; 120
b. 22; 24
c. 18; 120
d. 34; 28
e. none of the above
 
D
 
19. 
The crossover chart for location break-even analysis shows where
a. fixed costs are equal for alternative locations
b. variable costs are equal for alternative locations
c. total costs are equal for alternative locations
d. fixed costs equal variable costs
 
C
 
20. 
The center of gravity method does not take into consideration
a. the location of markets
b. the volume of goods shipped to the markets
c. the value of the goods shipped
d. the combination of volume and distance
 
C
 
21. 
The center-of-gravity method is used primarily to determine what type of locations?
a. service locations
b. manufacturing locations
c. distribution center locations
d. supplier locations
 
C
 
22. 
A regional bookstore chain is about to build a distribution center that is centrally located for its
eight retail outlets. It will most likely employ which of the following tools of analysis?
a. assembly line balancing
b. load-distance analysis
c. center-of-gravity model
d. linear programming
 
C
 
23. 
East Texas Seasonings is preparing to build one processing center to serve its four sources of
seasonings. The four source locations are at coordinates shown below. Also, the volume from each
source is provided. What is the center of gravity?
X-coordinate Y-coordinate Volume
Athens, Texas 30 30 150
Beaumont, Texas 20 10 350
Carthage, Texas 10 70 100
Denton, Texas 50 50 200
a. X = 28.125; Y = 31.25
b. X = 22,000; Y = 24,000
c. X = 27.5; Y = 40
d. center of gravity = 28
e. none of the above
 
A
 
24. 
Production and/or shipping costs are always considered in which of the following location decision
methods?
a. factor rating method
b. transportation method
c. locational break-even analysis
d. center-of-gravity method
 
B
 
25. 
The transportation method, when applied to location analysis
a. minimizes total fixed costs
b. minimizes total production and transportation costs
c. maximizes revenues
d. minimizes the movement of goods
 
B
 
26. 
Which of the following are not among the eight components of revenue and volume for the service
firm?
a. quality of the management
b. shipment cost of finished goods
5
c. purchasing power of the customer-drawing area
d. uniqueness of the firm's and the competitor's locations
e. competition in the area
 
B
 
27. 
Which of the following are among the eight components of revenue and volume for the service
firm?
a. uniqueness of the firm's and the competitor's locations
b. quality of the competition
c. quality of management
d. purchasing power of the customer-drawing area
e. all of the above
 
E
 
28. 
Traffic counts and purchasing power analysis of drawing area are techniques associated with
a. an industrial location decision
b. a manufacturing location decision
c. a retail or professional service location decision
d. the factor rating method
e. the transportation method
 
C
 
29. 
LaQuinta Motor Inns has a competitive edge over its rivals because it
a. uses regression analysis to determine which variables most influence profitability
b. picks better locations than its rivals
c. picks larger locations than its rivals
d. builds only along Interstate highways
e. all of the above
 
A
 
30. 
Traffic counts and demographic analysis of drawing areas are associated with
a. industrial location decisions
b. manufacturing location decisions
c. service location decisions
d. the transportation method
 
C
 
31. 
Which one of the following factors does not affect the volume and revenue for a service firm?
a. affluence of customer drawing area
b. competition in the area
c. physical qualities of facilities and neighboring businesses
d. quality of the competition
e. environmental regulations
 
E
 
32. 
Location analysis techniques typically employed by service organizations include
a. factor rating method
b. center of gravity method
c. purchasing power analysis of area
d. traffic counts
e. all of the above
 
E
 
33. 
Which of the following is most likely to affect the location decision of a service firm rather than a
manufacturing firm?
a. energy and utility costs
b. attitude toward unions
c. parking and access
d. cost of shipping finished goods
e. labor costs
 
C
 
34. 
Which of the following is a location analysis technique typically employed by a service
organization?
a. purchasing power analysis
b. linear programming
c. queuing theory
d. crossover charts
e. cost-volume analysis
 
A
 
35. 
A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a
location decision.
a. transportation costs
b. cost of raw materials
c. parking and access
d. climate
e. taxes
 
C
 
36. 
Location analysis techniques typically employed by manufacturing organizations include
a. transportation method
b. queuing theory
c. correlation analysis and traffic counts
d. simulation
 
A
 
37. 
Which of these assumptions is not associated with strategies for goods-producing location
decisions?
a. most major costs can be identified explicitly for each site
b. focus on identifiable cost
c. high customer contact issues are critical
d. intangible costs can be evaluated
e. location is a major determinant of cost
 
C
 
38. 
Which of the following is most likely to affect the location strategy of a manufacturing firm?
a. appearance/image of the area
b. utility costs
c. purchasing power of drawing area
d. competition in the area
 
B
 
39. 
Geographic Information Systems can assist the location decision by
a. automating center of gravity problems
b. computerizing factor rating analysis
c. combining geography with demographic analysis
d. updating transportation method solutions
e. giving good Internet placement for virtual storefronts
 
C