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Exam 8: Location Strategies

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Question 51

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The reason fast-food restaurants often are found in close proximity to each other is:

A) they enjoy competition.
B) location clustering near high traffic flows.
C) low cost.
D) availability of skilled labor.
E) all of these.

F) B) and D)
G) A) and D)

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Question 52

Multiple Choice

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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 ________.

A) 90; 100
B) 22; 24
C) 18; 120
D) 34; 28
E) none of these

F) B) and E)
G) A) and C)

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Question 53

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Unfavorable exchange rates can offset other savings in a location decision.

A highway contractor needs to locate a single supply point to provide road building materials to four projects. The four projects, which are all approximately the same magnitude, are located at the following coordinates. Coordinate units are in miles. (a) What is the center of gravity? (b) If a single truck were sent from center-of-gravity to each project and back (four round trips), how many miles would be traveled?

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive? If the company plans on producing 50,000 units, which location would be more attractive?

Which of the following costs would be incurred even if no units were produced?

Consider the assembly line below. The three fabrication operations run in parallel, such that each batch of 20 units only needs to go through one of the three fabrication operations. After that, each batch needs to go through both assembly operations, which occur simultaneously (specifically, 10 components are made for each unit in the fabrication stage-some components are then assembled in the Assembly 1 area while others are assembled in the Assembly 2 area) . The units are packaged and made ready for shipment in the final stage. What is the bottleneck time per batch of this operation?

What is a common method used to increase capacity with a lag strategy?

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next six years. If the cost of capital (i.e., interest rate) is 8 percent, what is the approximate net present value of this investment?

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, what is the weighted contribution of this product?

Tangible costs include which of the following?

A small manufacturer is considering several locations for a new facility. They have identified four factors that they consider to be important for their location decision. They have decided to assign scores to the four factors, with a higher score indicating a more favorable location. Use the information in the following table to perform a factor rating to select the best location.

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

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. (a) Calculate the volume-weighted center of gravity. (b) Calculate the simple center of gravity (all cities weighted equally). (c) Explain why the two calculations differ.

Which of the following is usually NOT one of the top considerations in choosing a country for a facility location?

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to ________ demand.

Substantial research has shown that a successful method of dealing with bottlenecks is to increase the bottleneck's capacity.

The World Economic Forum has developed a list that ranks countries on issues such as "competitiveness" and "corruption."

Adding a complementary product to what is currently being produced is a demand management strategy used when: