Question 1

Production and transportation costs are always considered in which of the following location decision methods?

Accepted Answer

Production and transportation costs are specifically considered in the transportation model, which is a quantitative technique used for optimizing transportation decisions. The other options do not explicitly consider production and transportation costs.

Question 2

A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.34 per unit. If annual demand is expected to be 9 million units, which plant offers the lowest total cost?

Accepted Answer

To determine the lowest total cost, we need to calculate the total cost for each option at 9 million units.

For option A, the total cost would be:

Total Cost = Fixed Cost + Variable Cost
Total Cost = $4,000,000 + ($0.30 x 9,000,000)
Total Cost = $6,700,000

For option B, the total cost would be:

Total Cost = Fixed Cost + Variable Cost
Total Cost = $3,600,000 + ($0.34 x 9,000,000)
Total Cost = $6,660,000

Therefore, option B offers the lowest total cost at 9 million units, making it the best choice.

Question 3

The ________ method is popular because a wide variety of factors, from education to recreation to labor skills, can be objectively included.

Accepted Answer

The answer of The ________ method is popular because a...

Question 4

The ________ is used to determine the best pattern of shipments from several points of supply to several points of demand.

Accepted Answer

The answer of The ________ is used to determine the...

Question 5

A farmers' cooperative association plans to build a new sugar mill in Southwestern Louisiana. The primary objective of the mill is to provide the farmers with a place to take their crop for processing that will reduce their transportation costs. The members of the co-op believe that the center-of-gravity method is appropriate for this objective. While there are over 200 sugar cane farms in the region, they are tightly clustered around six villages. Using the data below, use the center-of-gravity method to calculate the coordinates of the best location for this mill. All mileage references use the city of Lake Charles as (0,0).

Accepted Answer

The answer of A farmers' cooperative association plans to build...

Question 6

The ________ is a mathematical technique used for finding the best location for a single distribution point that services several stores or areas.

Accepted Answer

The answer of The ________ is a mathematical technique used...

Question 7

On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity where:

Accepted Answer

The crossover point is where the total costs are equal for two alternative locations. This is important because it shows where one location becomes more cost-effective than another, and helps in making a decision on which location to choose.

Question 8

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.  The score for Gary Mall is ________ and the score for Belt Line is ________.

Accepted Answer

To find the score for each site, we sum up the ratings in each row and then multiply by the weight for each factor. For Gary Mall: (4+2+3+4) x (0.15+0.1+0.3+0.45) = 13 x 1 = 13. For Belt Line: (1+5+4+2) x (0.15+0.1+0.3+0.45) = 12 x 1 = 12. Therefore, the score for Gary Mall is 13 and the score for Belt Line is 12. The best choice would be Belt Line since it has a slightly higher score.

Question 9

What kinds of location decisions are appropriate for the use of center-of-gravity analysis? What variable is being optimized in this analysis?

Accepted Answer

The answer of What kinds of location decisions are appropriate...

Question 10

A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below.
(a) Complete a numeric locational cost-volume analysis.
(b) Indicate over what range each of the alternatives A, B, C is the low-cost choice.
(c) Is any alternative never preferred? Explain.

Accepted Answer

The answer of A manufacturing company preparing to build a...

Question 11

Which of the following is an approach to location analysis that includes both qualitative and quantitative considerations?

Accepted Answer

The factor-rating method considers both quantitative and qualitative factors in its decision-making process. The other options mentioned may only consider one of these aspects or have a narrower focus.

Question 12

Identify the four major quantitative methods for solving location problems.

Accepted Answer

The answer of Identify the four major quantitative methods for...

Question 13

What are the advantages and disadvantages of the use of the factor-rating method?

Accepted Answer

The answer of What are the advantages and disadvantages of...

Question 14

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?

Accepted Answer

To find the center of gravity, we need to multiply the volume from each source by its respective coordinates, sum these products, and then divide by the total volume.

Center of gravity X-coordinate = (55000*28 + 40000*30 + 10000*35 + 30000*40) / (55000+40000+10000+30000) = 32.5

Center of gravity Y-coordinate = (55000*30 + 40000*40 + 10000*20 + 30000*30) / (55000+40000+10000+30000) = 35

Therefore, the center of gravity is at coordinates (32.5, 35), which is option C.

Question 15

The center-of-gravity method is used primarily to determine what type of locations?

Accepted Answer

The center-of-gravity method is primarily used to determine distribution center locations. It is a quantitative method that finds a location that minimizes the distance goods must travel between multiple facilities and the location.

Question 16

A regional bookstore chain wants 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?

Accepted Answer

The center-of-gravity method is a tool used to find the location that minimizes transportation costs between multiple locations. In this case, the bookstore chain is looking for a centrally-located distribution center, which fits the purpose of the center-of-gravity method.

Question 17

A clothing chain is considering two different locations for a new retail outlet. The organization has identified the four factors listed in the following table as the basis for evaluation, and it has assigned weights as shown. The manager has rated each location on each factor, on a 100-point basis (higher scores are better), as shown under the respective columns for Barclay and Chester.
a. Calculate the composite score for each alternative location.
b. Which site should be chosen?
c. Are you concerned about the sensitivity and subjectivity of this solution? Comment.

Accepted Answer

The answer of A clothing chain is considering two different...

Question 18

The transportation model, when applied to location analysis:

Accepted Answer

The transportation model in location analysis is designed to minimize the combined total of production and transportation costs, ensuring that goods are produced and delivered in the most cost-efficient manner.

Question 19

What kinds of location decisions are appropriate for the use of locational cost-volume analysis? Write a brief paragraph explaining how the method can assist an operations manager in choosing among alternative sites in making a location decision.

Accepted Answer

The answer of What kinds of location decisions are appropriate...

Question 20

A county wants to build one centrally-located processing facility to serve the county's four recycling drop-off locations. The four drop-offs have characteristics as given in the table below. What is the approximate center of gravity of these four locations?

Accepted Answer

To find the center of gravity, we need to calculate the weighted average of the x-coordinates and the y-coordinates.

The formula for the x-coordinate is (sum of (weight * x-coordinate)) / (sum of weights).

Using this formula, we get:
((200 * 4) + (150 * 6) + (100 * 4) + (50 * 4)) / (200 + 150 + 100 + 50) ≈ 4.90

Similarly, the formula for the y-coordinate is:
((200 * 5) + (150 * 7) + (100 * 5) + (50 * 3)) / (200 + 150 + 100 + 50) ≈ 5.85

Therefore, the approximate center of gravity is (4.90, 5.85), which is choice D.

Quiz 8: Location Strategies