ch8

Student:___________________________________________________________________________
1.Locationdecisionsarebasicallyonetimedecisionsusuallymadebyneworganizations.
TrueFalse
2.Thefactthatmosttypesoffirmsarelocatedineverysectionofthecountrysuggeststhatinmanycases,
locationdecisionsarenotoverlyimportant;onelocationtypicallyisasgoodasanother.
TrueFalse
3.Youcan'tmakeamistakebylocatingwherelaborcostsarelow.
TrueFalse
4.Advancedcommunicationshasaidedglobalization.
TrueFalse
5.Thefirststepindevelopinglocationalternativesisidentifyingimportantfactors.
TrueFalse
6.Anexampleofaregionalfactorinlocationplanningisthelocationofourmarkets(eitherexistingor
potential).
TrueFalse
7.Astrategythatemphasizesconvenienceforthecustomerswouldprobablyselectasingleverylargefacility.
TrueFalse
8.Forserviceorganizations,thedominantfactorsinlocationanalysisusuallyaremarketrelated.
True False
9.GlobalPositioningSystems(GPS)usetheCenterofGravitymethodtoestablishstartinggridcoordinates.
TrueFalse
10.Laborlawsareanimportantsiterelatedfactor.
TrueFalse

11.Webbased,retailbusinessesshouldbelocatednearthecustomertoreducetheirlongdistancephone
charges.
TrueFalse
12.Forserviceandretailstores,aprimefactorinlocationanalysisiscustomeraccess.
True False
13.Retailbusinessesgenerallypreferlocationsthatarenotnearotherretailers,asthisreducestheir
competition.
TrueFalse
14.Technologyhasmadecommunicationwithglobaloperationsaseasyaslocalcommunication.
TrueFalse
15.Factorratingislimitedtoquantitativeinformationconcerninglocationdecisions.
TrueFalse

16.Asaresultofthefactorratinganalysis,amanagermaysometimesrejectallofthealternativesunder
considerationwhenthecompositescoresarebelowtheminimumthresholdvalue.
TrueFalse
17.Thelowercostofforeignlaborisoftenoffsetbylowerlevelsofproductivity.
TrueFalse
18.Thecenterofgravitymethodisalocationplanningtechniquethatdeterminesacompositescorefrom
weightedfactorevaluation.
TrueFalse
19.Thecenterofgravitymethodisusefulinlocationplanningforthelocationofadistributioncenter.
TrueFalse
20.Thecenterofgravitymethodoflocationplanningisaccurateonlywhenthequantitiestobeshippedtoeach
locationareequal.
TrueFalse
21.Locationdecisionsarecloselytiedtoanorganization'sstrategies.
TrueFalse
22.A"microfactory"isasmall,automatedfacilitywithanarrowproductfocuslocatednearmajormarkets.
TrueFalse
23.Oneofthereasonsfortheimportanceoflocationdecisionsisitsstrategicimportancetothesupplychains.
TrueFalse
24.Nearnesstorawmaterialswouldbemostimportanttoa
A.grocerystore
B.taxpreparationservice
C.manufacturingcompany
D.postoffice
E.hospital
25.AonehourphotoprocessingmachineinaWalMartstoreisanexampleofa_________.
A.microfactory
B.downsizestrategy
C.diversifiedstrategy
D.leanproductionsystem
E.fallingpricestrategy
26.Whichstatementbestcharacterizesatypicalsearchforlocationalternatives?
A.identifythebestlocationchoice
B.minimizecostconsequences
C.maximizeassociatedprofits
D.locatenearmarkets
E.identifyacceptablelocations

27.Whichofthefollowingisnotalocationoptionthatmanagementcanconsiderinlocationplanning?
A.expandanexistingfacility
B.addanewlocation
C.relocatefromonelocationtoanother
D.donothing
E.Allarepossibleoptions.
28.Whichofthefollowingisthelaststepintheprocedureformakinglocationdecisions?
A.determinetheevaluationcriteria
B.identifyimportantfactors
C.developlocationalternatives
D.evaluatealternativesandmakeaselection
E.requestinputregardingalternatives
29.Whenalocationevaluationincludesbothquantitativeandqualitativeinputs,atechniquethatcanbeusedis
___________.
A.Linearprogramming
B.Consumersurveys
C.Factorrating
D.Transportationmodels
E.Centerofgravitymethods
30.Thecenterofgravitymethodisusedto_______traveltime,distanceandcosts.
A.Normalize
B.Eliminate
C.Average
D.Minimize
E.Document
31.Inlocationplanning,thelocationofrawmaterials,thelocationofmarkets,andlaborfactorsare:
A.regionalfactors
B.communityfactors
C.siterelatedfactors
D.nationalfactors
E.minorconsiderations
32.SoftwaresystemsknownasGIShelpinlocationanalysis.TheinitialsGISstandfor_______.
A.GraphicInterfaceSystems
B.GlobalIntegratedSoftware
C.GradedInformationSystems
D.GeoIntensiveSoftware
E.GeographicalInformationSystem
33.Facilities,personnelandoperationsthatarelocatedaroundtheworldarecalled:
A.nondomestic
B.diversifiedoperations
C.globalization
D.worldwidepresence
E.virtualorganization

34.Somecommunitiesofferfinancialandotherincentivesto______newbusinesses.
A.Tax
B.Attract
C.Marginalize
D.Incorporate
E.Zone
35.Locationoptionsdon'tusuallyinclude:
A.expansion
B.acontract
C.addingnewfacilities
D.moving
E.doingnothing
36.Culturaldifferences,Customerpreferences,LaborandResourcesarefactorsrelatingto:
A.Regionalchoices
B.Siteselection
C.Zoning
D.Productdesign
E.Foreignlocations
37.Themethodforevaluatinglocationalternativeswhichusestheirtotalcostcurvesis:
A.costvolumeanalysis
B.transportationmodelanalysis
C.factorratinganalysis
D.linearregressionanalysis
E.MODIanalysis
38.Themethodforevaluatinglocationalternativeswhichminimizesshippingcostsbetweenmultiplesending
andreceivinglocationsis:
A.costvolumeanalysis
B.transportationmodelanalysis
C.factorratinganalysis
D.linearregressionanalysis
E.MODIanalysis
39.Themethodforevaluatinglocationalternativeswhichusestheircomposite(weightedaverage)scoresis:
A.costvolumeanalysis
B.transportationmodelanalysis
C.factorratinganalysis
D.linearregressionanalysis
E.MODIanalysis
40.Anapproachtolocationanalysisthatcanincludebothqualitativeandquantitativeconsiderationsis:
A.locationcostvolume
B.factorrating
C.transportationmodel
D.expectedvalue(netpresentvalue)
E.financialanalysis

41.Alocationanalysishasbeennarroweddowntotwolocations,AkronandBoston.Themainfactorsinthe
decisionwillbethesupplyofrawmaterials,whichhasaweightof.50,transportationcost,whichhasaweight
of.40,andlaborcost,whichhasaweightof.10.Thescoresforrawmaterials,transportation,andlaborarefor
Akron60,80,and70,respectively;forBoston70,50,and90,respectively.Giventhisinformationanda
minimumacceptablecompositescoreof75,wecansaythatthemanagershould:
A.beindifferentbetweentheselocations
B.chooseAkron
C.chooseBoston
D.rejectbothlocations
E.buildaplantinbothcities
42.Amanagermustdecidebetweentwolocationalternatives,BostonandChicago.Bostonwouldhaveannual
fixedcostsof$70,000,transportationcostsof$60perunit,andlaborandmaterialcostsof$200perunit.
Chicagowouldhaveannualfixedcostsof$90,000,transportationcostsof$40perunit,andlaborandmaterial
costsof$170perunit.Revenuewillbe$300perunit.
(A)Whichalternativewouldyieldthehigherprofitforanannualdemandof3,000units?
(B)Wouldthetwolocationsyieldthesameprofitatacertainvolume?Ifso,atwhatvolumewouldthatbe?
43.Afirmistryingtodecidebetweentwolocationalternatives,AlbanyandBaltimore.Albanywouldresultin
annualfixedcostsof$60,000,laborcostsof$7perunit,materialcostsof$10perunit,transportationcostsof
$15perunit,andrevenueperunitof$50.Baltimorewouldhaveannualfixedcostsof$80,000,laborcostsof$6
perunit,materialcostsof$9perunit,transportationcostsof$14perunit,andrevenueperunitof$48.
(A)Atanannualvolumeof9,000,whichwouldyieldthehigherprofit?
(B)Atwhatannualvolumewouldmanagementbeindifferentbetweenthetwoalternativesintermsofannual
profits?
44.Giventheinformationbelowonscoresofthreelocationalternatives,whichalternativewouldyou
recommend?Why?

45.Determinethecenterofgravitylocationforthedestinationsandshippingquantitiesshownbelow:

46.Determinetheoptimumlocationforadistributioncentertoservethefollowinglocations.Shipmentstoeach
locationwillbeapproximatelyequal.

TheSkulls,astudentsocialorganization,hastwodifferentlocationsunderconsiderationforconstructinganew
chapterhouse.Skull'spresident,aPOMstudent,estimatesthatduetodifferinglandcosts,utilityrates,etc.,
bothfixedandvariablecostswouldbedifferentforeachoftheproposedsites,asfollows:

47.WhatwouldbetotalannualcostsfortheAlphaAve.locationwithtwentypersonslivingthere?
A.$5,400
B.$4,000
C.$5,000
D.$7,000
E.$9,000
48.Whatwouldbetotalannualcostsforeitherlocationatthepointofindifference?
A.$13,000
B.$13,350
C.$9,000
D.$17,000
E.$19,200
49.Ifitisestimatedthatthirtypersonswillbelivinginthisnewchapterhouse,whichlocationshouldtheSkulls
select?
A.AlphaAve.
B.BetaBlvd.
C.eitherAlphaAve.orBetaBlvd.
D.rejectbothAlphaAve.norBetaBlvd.
E.becomeavirtualorganization
50.Ifitisestimatedthatthirtypersonswillbelivinginthisnewchapterhouse,whatwouldbetheSkull's
annualcostsavingsbyselectingthelesscostlylocation,ratherthanthemorecostly?
A.$0
B.$1,500
C.$200
D.$150
E.$350

51.WhataretotalcostsforsiteAforaquantityof5,000unitsperyear?
52.WhataretotalcostsforsiteBforaquantityof5,000unitsperyear?
53.WhataretotalcostsforsiteCforaquantityof5,000unitsperyear?
54.ForwhatquantitywouldyoubeindifferentbetweenselectingsiteAorsiteB?
55.ForwhatquantitywouldyoubeindifferentbetweenselectingsiteBorsiteC?
56.ForwhatrangeofoutputwouldyouprefersiteA?
57.ForwhatrangeofoutputwouldyouprefersiteB?
58.ForwhatrangeofoutputwouldyouprefersiteC?
59.Whichsitewouldyoupreferforaquantityof20,000unitsperyear?
60.Forthepreferredsitefor20,000unitsperyear,whatwouldbeyourtotalcosts?
61.Forthepreferredsitefor20,000unitsperyear,whatwouldbeyourcostsavingscomparedtoeachofthe
othertwosites?
Amanufacturingfirmisconsideringtwolocationsforaplanttoproduceanewproduct.Thetwolocations
havefixedandvariablecostsasfollows:

62.Atwhatannualoutputwouldthecompanybeindifferentbetweenthetwolocations?
A.60,000units
B.15,000units
C.10,000units
D.20,000units
E.4,000units

63.WhatwouldthetotalannualcostsbeforthePhoenixlocationwithanannualoutputof10,000units?
A.$280,000
B.$140,000
C.$220,000
D.$300,000
E.$156,000
64.Whatwouldbethetotalannualcostsatthepointofindifference?
A.$300,000
B.$240,000
C.$380,000
D.$220,000
E.$760,000

65.Ifannualdemandisestimatedtobe20,000units,whichlocationshouldthecompanyselect?
A.Atlanta
B.Phoenix
C.eitherAtlantaorPhoenix
D.rejectbothAtlantaandPhoenix
E.buildatbothlocations
66.Iftheannualdemandwillbe20,000units,whatwouldbethecostadvantageofthebetterlocation?
A.$20,000
B.$460,000
C.$480,000
D.$80,000
E.$60,000
Alocationanalysishasbeennarroweddowntothreelocations.Thecriticalfactors,theirweights,andthe
ratingsforeachlocationareshownbelow:

67.WhatisthecompositescoreforlocationA?
A.76
B.75
C.78
D.74
E.76.33
68.WhatisthecompositescoreforlocationB?
A.76
B.75
C.78
D.74
E.76.33
69.WhatisthecompositescoreforlocationC?
A.76
B.75
C.78
D.74
E.76.33
70.Iftheselectioncriteriaistobethegreatestcompositescore,managementshouldchoose:
A.locationA
B.locationB
C.locationC
D.eitherBorC
E.torejectalllocations

71.Ifthedecisionsruleistoselectthelocationwiththegreatestcompositescoreexceeding80,management
shouldchoose:
A.locationA
B.locationB
C.locationC
D.eitherBorC
E.torejectalllocations
AclothingmanufacturerproducesclothinginfivelocationsintheU.S.Inamovetoverticalintegration,the
companyisplanninganewfabricproductionplantthatwillsupplyfabrictoallfiveclothingplants.The
clothingplantshavebeenlocatedonacoordinatesystemasfollows:

72.Iftheamountoffabricshippedtoeachplantisequal,whatistheoptimallocationforthefabricplant?
A.5,5
B.6,4
C.4,6
D.6,2
E.5,4

73.Shipmentsoffabrictoeachplantvaryperweekasfollows:plantA,200units;plantB,400units;plantC,
300units;plantD,300units;andplantE,200units.Whatistheoptimallocationforthefabricplant?
A.6.2,3.0
B.6.0,4.0
C.6.5,5.3
D.5.6,4.4
E.5.0,3.0

Ahardwaredistributorhasregionalwarehousesatthelocationsshownbelow.Thecompanywantstolocatea
newcentraldistributioncentertoservethiswarehousenetwork.

74.Ifweeklyshipmentstoeachwarehousewillbeapproximatelyequal,whatistheoptimallocationforthe
distributioncenter?
A.5,5
B.5,4
C.4,5
D.5,6
E.6,5

75.Weeklyshipmentstoeachwarehousewillbe:WH1,100;WH2,150;WH3,120;WH4,150;andWH5,120.
Whatistheoptimallocationofthedistributioncenter?
A.5.1,4.2
B.5.2,4.0
C.5.1,5.1
D.4.2,5.1
E.4.9,5.2

76.Whichofthefollowingcircumstanceswouldbeleastlikelytoleadtoaneedforanewlocation?
A.Shiftingofmarkets.
B.Depletionofbasicinputs.
C.Growthindemandthatisleadingtogreaterutilizationofexistingcapacity.
D.Theneedtoexpandintonewmarkets.
E.Theopportunitytotakeadvantageofglobalizationtrends.

77.Whichofthefollowingisleastimportantasaconsiderationforafirmatthebeginningofasupplychain?
A.Accesstoendconsumers
B.Accesstoresources
C.Proximitytocustomers
D.Accesstotransportationinfrastructure
E.Accesstoproductivelabor

78.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.Whatwouldits
totalcostbeatamonthlyvolumeof250units?
A.$105,200
B.$102,500
C.$100,250
D.$100,520
E.$105,500

79.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.Whatwouldits
totalcostbeatamonthlyvolumeof550units?
A.$105,200
B.$102,500
C.$100,250
D.$100,520
E.$105,500

80.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.LocationchoiceJ
hasmonthlyfixedcostsof$150,000andperunitvariablecostsof$9.Atwhatvolumewouldtheselocations
haveequaltotalcosts?
A.30,000units
B.25,000units
C.40,000units
D.50,000units
E.60,000units

ch8Key
1.Locationdecisionsarebasicallyonetimedecisionsusuallymadebyneworganizations.
FALSE
Mostorganizationsfacelocationdecisionsovertime.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0801Identifysomeofthemainreasonsorganizationsneedtomakelocationdecisions.
StevensonChapter08#1
TopicArea:TheNatureofLocationDecisions

2.Thefactthatmosttypesoffirmsarelocatedineverysectionofthecountrysuggeststhatinmanycases,
locationdecisionsarenotoverlyimportant;onelocationtypicallyisasgoodasanother.
FALSE
Manyfactorsmakelocationsrelativelymoreorlessattractive.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0802Explainwhylocationdecisionsareimportant.
StevensonChapter08#2
TopicArea:TheNatureofLocationDecisions

3.Youcan'tmakeamistakebylocatingwherelaborcostsarelow.
FALSE
Laborcostsareonlyoccasionallyaprimaryconsiderationinlocationdecisions.

AACSB:ReflectiveThinking
Blooms:Understand
Difficulty:Medium
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#3
TopicArea:IdentifyingaCountry,Region,CommunityandSite

4.Advancedcommunicationshasaidedglobalization.
TRUE
Globalizationhasbeenhelpedalongbyadvancesincommunicationtechnology.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#4
TopicArea:GlobalLocations

5.Thefirststepindevelopinglocationalternativesisidentifyingimportantfactors.
FALSE
Thefirststepisdecidingonthecriteriaforevaluatingthealternatives.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Hard
LearningObjective:0805Outlinethedecisionprocessformakingthesekindsofdecisions.
StevensonChapter08#5
TopicArea:GeneralProceduresforMakingLocationDecisions

6.Anexampleofaregionalfactorinlocationplanningisthelocationofourmarkets(eitherexistingor
potential).
TRUE
Marketlocationisaregionalfactor.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#6
TopicArea:IdentifyingaCountry,Region,CommunityandSite

7.Astrategythatemphasizesconvenienceforthecustomerswouldprobablyselectasingleverylargefacility.
FALSE
Convenienceforcustomerswouldtendtonecessitatesmall,dispersedfacilities.

AACSB:ReflectiveThinking
Blooms:Understand
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#7
TopicArea:ServiceandRetailLocations

8.Forserviceorganizations,thedominantfactorsinlocationanalysisusuallyaremarketrelated.
TRUE
Marketconsiderationsaredominantinservicelocationdecisions.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#8
TopicArea:ServiceandRetailLocations

9.GlobalPositioningSystems(GPS)usetheCenterofGravitymethodtoestablishstartinggridcoordinates.
FALSE
GPSusessatellitetransmissionsforitsgridcoordinates.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#9
TopicArea:IdentifyingaCountry,Region,CommunityandSite

10.Laborlawsareanimportantsiterelatedfactor.
FALSE
Laborlawsarecountryorregionrelatedfactors.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#10
TopicArea:IdentifyingaCountry,Region,CommunityandSite

11.Webbased,retailbusinessesshouldbelocatednearthecustomertoreducetheirlongdistancephone
charges.
FALSE
Centralizedlocationsareappropriateforwebbasedretailbusinesses.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#11
TopicArea:ServiceandRetailLocations

12.Forserviceandretailstores,aprimefactorinlocationanalysisiscustomeraccess.
TRUE
Customeraccessisacriticalconsiderationinservicesandretailing.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#12
TopicArea:ServiceandRetailLocations

13.Retailbusinessesgenerallypreferlocationsthatarenotnearotherretailers,asthisreducestheir
competition.
FALSE
Retailersprefertolocatenearcustomers,whichmeanstheyoftenlocatenearoneanother.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#13
TopicArea:ServiceandRetailLocations

14.Technologyhasmadecommunicationwithglobaloperationsaseasyaslocalcommunication.
FALSE
Whiletechnologyhasmadesomefacetsofglobaloperationseasier,otherfacetsarestilldifficult.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#14
TopicArea:GlobalLocations

15.Factorratingislimitedtoquantitativeinformationconcerninglocationdecisions.
FALSE
Qualitativeconsiderationscanbebroughtintofactorratingapproaches.

AACSB:ReflectiveThinking
Blooms:Understand
Difficulty:Hard
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#15
TopicArea:EvaluatingLocationAlternatives

16.Asaresultofthefactorratinganalysis,amanagermaysometimesrejectallofthealternativesunder
considerationwhenthecompositescoresarebelowtheminimumthresholdvalue.
TRUE
Ifaminimumscoreisnecessary,noalternativemaybesuitable.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#16
TopicArea:EvaluatingLocationAlternatives

17.Thelowercostofforeignlaborisoftenoffsetbylowerlevelsofproductivity.
TRUE
Foreignlaboroftenischeaperbutlessproductivethandomesticlabor.

AACSB:ReflectiveThinking
Blooms:Understand
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#17
TopicArea:IdentifyingaCountry,Region,CommunityandSite

18.Thecenterofgravitymethodisalocationplanningtechniquethatdeterminesacompositescorefrom
weightedfactorevaluation.
FALSE
Factorscoringdeterminesacompositescorefromweightedfactorevaluation.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#18
TopicArea:EvaluatingLocationAlternatives

19.Thecenterofgravitymethodisusefulinlocationplanningforthelocationofadistributioncenter.
TRUE
Itoptimizesthelocationforadistributioncenter.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#19
TopicArea:EvaluatingLocationAlternatives

20.Thecenterofgravitymethodoflocationplanningisaccurateonlywhenthequantitiestobeshippedtoeach
locationareequal.
FALSE
Centerofgravityapproachesfactorindifferencesinquantitiesbeingshipped.

AACSB:ReflectiveThinking
Blooms:Understand
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#20
TopicArea:EvaluatingLocationAlternatives

21.Locationdecisionsarecloselytiedtoanorganization'sstrategies.
TRUE
Anorganization'sstrategyshouldinformlocationdecisions.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0801Identifysomeofthemainreasonsorganizationsneedtomakelocationdecisions.
StevensonChapter08#21
TopicArea:TheNatureofLocationDecisions

22.A"microfactory"isasmall,automatedfacilitywithanarrowproductfocuslocatednearmajormarkets.
TRUE
Microfactoriesservenarrowslicesofamarketveryefficiently.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#22
TopicArea:IdentifyingaCountry,Region,CommunityandSite

23.Oneofthereasonsfortheimportanceoflocationdecisionsisitsstrategicimportancetothesupplychains.
TRUE
Afirm'ssupplychainperformanceisstronglyaffectedbylocationdecisions.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0802Explainwhylocationdecisionsareimportant.
StevensonChapter08#23
TopicArea:TheNatureofLocationDecisions

24.Nearnesstorawmaterialswouldbemostimportanttoa
A. grocerystore
B. taxpreparationservice
C. manufacturingcompany
D. postoffice
E. hospital
Manufacturersespeciallyvalueproximitytorawmaterials.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#24
TopicArea:IdentifyingaCountry,Region,CommunityandSite

25.AonehourphotoprocessingmachineinaWalMartstoreisanexampleofa_________.
A. microfactory
B. downsizestrategy
C. diversifiedstrategy
D. leanproductionsystem
E. fallingpricestrategy
Amicrofactoryisaveryefficientmeansofservingasmallsliceofabroadmarket.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#25
TopicArea:IdentifyingaCountry,Region,CommunityandSite

26.Whichstatementbestcharacterizesatypicalsearchforlocationalternatives?
A. identifythebestlocationchoice
B. minimizecostconsequences
C. maximizeassociatedprofits
D. locatenearmarkets
E. identifyacceptablelocations
Findingalternativesrequiresthatwefindwhichalternativesmightbesuitableandwhichmightnot.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0805Outlinethedecisionprocessformakingthesekindsofdecisions.
StevensonChapter08#26
TopicArea:GeneralProceduresforMakingLocationDecisions

27.Whichofthefollowingisnotalocationoptionthatmanagementcanconsiderinlocationplanning?
A. expandanexistingfacility
B. addanewlocation
C. relocatefromonelocationtoanother
D. donothing
E. Allarepossibleoptions.
Alloftheseshouldormightbeconsidered.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#27
TopicArea:TheNatureofLocationDecisions

28.Whichofthefollowingisthelaststepintheprocedureformakinglocationdecisions?
A. determinetheevaluationcriteria
B. identifyimportantfactors
C. developlocationalternatives
D. evaluatealternativesandmakeaselection
E. requestinputregardingalternatives
Whenallalternativeshavebeenevaluateditistimetomakeadecision.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0805Outlinethedecisionprocessformakingthesekindsofdecisions.
StevensonChapter08#28
TopicArea:GeneralProceduresforMakingLocationDecisions

29.Whenalocationevaluationincludesbothquantitativeandqualitativeinputs,atechniquethatcanbeusedis
___________.
A. Linearprogramming
B. Consumersurveys
C. Factorrating
D. Transportationmodels
E. Centerofgravitymethods
Factorratingapproachescanincorporatebothquantitativeandqualitativeconsiderations.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#29
TopicArea:EvaluatingLocationAlternatives

30.Thecenterofgravitymethodisusedto_______traveltime,distanceandcosts.
A. Normalize
B. Eliminate
C. Average
D. Minimize
E. Document
Thecenterofgravitymethodminimizestraveltime,distanceandcosts.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#30
TopicArea:EvaluatingLocationAlternatives

31.Inlocationplanning,thelocationofrawmaterials,thelocationofmarkets,andlaborfactorsare:
A. regionalfactors
B. communityfactors
C. siterelatedfactors
D. nationalfactors
E. minorconsiderations
Theseareregionalfactors.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#31
TopicArea:IdentifyingaCountry,Region,CommunityandSite

32.SoftwaresystemsknownasGIShelpinlocationanalysis.TheinitialsGISstandfor_______.
A. GraphicInterfaceSystems
B. GlobalIntegratedSoftware
C. GradedInformationSystems
D. GeoIntensiveSoftware
E. GeographicalInformationSystem
GISstandsforGeographicalInformationSystem.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0805Outlinethedecisionprocessformakingthesekindsofdecisions.
StevensonChapter08#32
TopicArea:IdentifyingaCountry,Region,CommunityandSite

33.Facilities,personnelandoperationsthatarelocatedaroundtheworldarecalled:
A. nondomestic
B. diversifiedoperations
C. globalization
D. worldwidepresence
E. virtualorganization
Globalizationinvolvesfacilities,personnelandoperationsthatarelocatedaroundtheworld.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#33
TopicArea:GlobalLocations

34.Somecommunitiesofferfinancialandotherincentivesto______newbusinesses.
A. Tax
B. Attract
C. Marginalize
D. Incorporate
E. Zone
Businessesoftenweighsuchincentivesintheirlocationdecisionprocesses.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#34
TopicArea:IdentifyingaCountry,Region,CommunityandSite

35.Locationoptionsdon'tusuallyinclude:
A. expansion
B. acontract
C. addingnewfacilities
D. moving
E. doingnothing
Acontracthaslittletodowithlocationoptions.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Hard
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
StevensonChapter08#35
TopicArea:TheNatureofLocationDecisions

36.Culturaldifferences,Customerpreferences,LaborandResourcesarefactorsrelatingto:
A. Regionalchoices
B. Siteselection
C. Zoning
D. Productdesign
E. Foreignlocations
Foreignlocationsconcernswithrespecttotheseissues.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Hard
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
StevensonChapter08#36
TopicArea:IdentifyingaCountry,Region,CommunityandSite

37.Themethodforevaluatinglocationalternativeswhichusestheirtotalcostcurvesis:
A. costvolumeanalysis
B. transportationmodelanalysis
C. factorratinganalysis
D. linearregressionanalysis
E. MODIanalysis
Costvolumeanalysisisbasedontotalcostcurves.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#37
TopicArea:EvaluatingLocationAlternatives

38.Themethodforevaluatinglocationalternativeswhichminimizesshippingcostsbetweenmultiplesending
andreceivinglocationsis:
A. costvolumeanalysis
B. transportationmodelanalysis
C. factorratinganalysis
D. linearregressionanalysis
E. MODIanalysis
Transportationmodelanalysisminimizesshippingcostsbetweenmultiplesendingandreceivinglocations.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#38
TopicArea:EvaluatingLocationAlternatives

39.Themethodforevaluatinglocationalternativeswhichusestheircomposite(weightedaverage)scoresis:
A. costvolumeanalysis
B. transportationmodelanalysis
C. factorratinganalysis
D. linearregressionanalysis
E. MODIanalysis
Factorratinganalysisevaluatesbyusingtheircomposite(weightedaverage)scores.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#39
TopicArea:EvaluatingLocationAlternatives

40.Anapproachtolocationanalysisthatcanincludebothqualitativeandquantitativeconsiderationsis:
A. locationcostvolume
B. factorrating
C. transportationmodel
D. expectedvalue(netpresentvalue)
E. financialanalysis
Factorratingcanincludebothqualitativeandquantitativeconsiderations.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#40
TopicArea:EvaluatingLocationAlternatives

41.Alocationanalysishasbeennarroweddowntotwolocations,AkronandBoston.Themainfactorsinthe
decisionwillbethesupplyofrawmaterials,whichhasaweightof.50,transportationcost,whichhasaweight
of.40,andlaborcost,whichhasaweightof.10.Thescoresforrawmaterials,transportation,andlaborarefor
Akron60,80,and70,respectively;forBoston70,50,and90,respectively.Giventhisinformationanda
minimumacceptablecompositescoreof75,wecansaythatthemanagershould:
A. beindifferentbetweentheselocations
B. chooseAkron
C. chooseBoston
D. rejectbothlocations
E. buildaplantinbothcities
Neitherlocationhastheminimumacceptablescore.

AACSB:Analytic
Blooms:Apply
Difficulty:Hard
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#41
TopicArea:EvaluatingLocationAlternatives

42.Amanagermustdecidebetweentwolocationalternatives,BostonandChicago.Bostonwouldhaveannual
fixedcostsof$70,000,transportationcostsof$60perunit,andlaborandmaterialcostsof$200perunit.
Chicagowouldhaveannualfixedcostsof$90,000,transportationcostsof$40perunit,andlaborandmaterial
costsof$170perunit.Revenuewillbe$300perunit.
(A)Whichalternativewouldyieldthehigherprofitforanannualdemandof3,000units?
(B)Wouldthetwolocationsyieldthesameprofitatacertainvolume?Ifso,atwhatvolumewouldthatbe?

A)Atavolumeof3,000units,Boston'sprofitwouldbe$50,000andChicago'sprofitwouldbe$180,000.
B)Atanannualvolumeof400units,bothlocationswouldhaveidenticallossesof$54,000.
Feedback:Atavolumeof3,000units,Boston'sprofitwouldbe$50,000andChicago'sprofitwouldbe
$180,000.Atanannualvolumeof400units,bothlocationswouldhaveidenticallossesof$54,000.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#42
TopicArea:EvaluatingLocationAlternatives

43.Afirmistryingtodecidebetweentwolocationalternatives,AlbanyandBaltimore.Albanywouldresultin
annualfixedcostsof$60,000,laborcostsof$7perunit,materialcostsof$10perunit,transportationcostsof
$15perunit,andrevenueperunitof$50.Baltimorewouldhaveannualfixedcostsof$80,000,laborcostsof$6
perunit,materialcostsof$9perunit,transportationcostsof$14perunit,andrevenueperunitof$48.
(A)Atanannualvolumeof9,000,whichwouldyieldthehigherprofit?
(B)Atwhatannualvolumewouldmanagementbeindifferentbetweenthetwoalternativesintermsofannual
profits?

A)Atanannualvolumeof9,000,Albany'sprofitof$102,000ishigherthanBaltimore'sprofitof$91,000.
B)Profitsforthesetwolocationsareidenticalatanannualvolumeof20,000units.
Feedback:Atanannualvolumeof9,000,Albany'sprofitof$102,000ishigherthanBaltimore'sprofitof
$91,000.Profitsforthesetwolocationsareidenticalatanannualvolumeof20,000units.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#43
TopicArea:EvaluatingLocationAlternatives

44.Giventheinformationbelowonscoresofthreelocationalternatives,whichalternativewouldyou
recommend?Why?

Compositescoresare:A=72,B=69,andC=69.Ifthecriterionishighestcomposite,chooseA.
Feedback:A'scompositescoreishighest.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#44
TopicArea:EvaluatingLocationAlternatives

45.Determinethecenterofgravitylocationforthedestinationsandshippingquantitiesshownbelow:

Feedback:Usethecenterofgravityformulastofindweightedaveragevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#45
TopicArea:EvaluatingLocationAlternatives

46.Determinetheoptimumlocationforadistributioncentertoservethefollowinglocations.Shipmentstoeach
locationwillbeapproximatelyequal.

Feedback:Usethecenterofgravityformulastofindweightedaveragevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#46
TopicArea:EvaluatingLocationAlternatives

TheSkulls,astudentsocialorganization,hastwodifferentlocationsunderconsiderationforconstructinga
newchapterhouse.Skull'spresident,aPOMstudent,estimatesthatduetodifferinglandcosts,utilityrates,etc.,
bothfixedandvariablecostswouldbedifferentforeachoftheproposedsites,asfollows:

StevensonChapter08

47.WhatwouldbetotalannualcostsfortheAlphaAve.locationwithtwentypersonslivingthere?
A. $5,400
B. $4,000
C. $5,000
D. $7,000
E. $9,000
Multiplythevariablecostbythevolume,thenaddthatproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#47
TopicArea:EvaluatingLocationAlternatives

48.Whatwouldbetotalannualcostsforeitherlocationatthepointofindifference?
A. $13,000
B. $13,350
C. $9,000
D. $17,000
E. $19,200
Dividethedifferenceinfixedcostbythedifferedinvariablecost.Thisleadstothepointofindifference.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#48
TopicArea:EvaluatingLocationAlternatives

49.Ifitisestimatedthatthirtypersonswillbelivinginthisnewchapterhouse,whichlocationshouldtheSkulls
select?
A. AlphaAve.
B. BetaBlvd.
C. eitherAlphaAve.orBetaBlvd.
D. rejectbothAlphaAve.norBetaBlvd.
E. becomeavirtualorganization
Multiplythevariablecostbythevolume,thenaddthatproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#49
TopicArea:EvaluatingLocationAlternatives

50.Ifitisestimatedthatthirtypersonswillbelivinginthisnewchapterhouse,whatwouldbetheSkull's
annualcostsavingsbyselectingthelesscostlylocation,ratherthanthemorecostly?
A. $0
B. $1,500
C. $200
D. $150
E. $350
Comparetotalcoststoarriveatthisanswer.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#50
TopicArea:EvaluatingLocationAlternatives

StevensonChapter08

51.WhataretotalcostsforsiteAforaquantityof5,000unitsperyear?
$150,000
Feedback:MultiplyA'svariablecostby5,000,thenaddthatproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#51
TopicArea:EvaluatingLocationAlternatives

52.WhataretotalcostsforsiteBforaquantityof5,000unitsperyear?
$160,000
Feedback:MultiplyB'svariablecostby5,000,thenaddthatproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#52
TopicArea:EvaluatingLocationAlternatives

53.WhataretotalcostsforsiteCforaquantityof5,000unitsperyear?
$185,000
Feedback:MultiplyC'svariablecostby5,000,thenaddthatproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#53
TopicArea:EvaluatingLocationAlternatives

54.ForwhatquantitywouldyoubeindifferentbetweenselectingsiteAorsiteB?
10,000unitsperyear
Feedback:Dividethedifferenceinfixedcostbythedifferedinvariablecost.Thisleadstothepointof
indifference.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#54
TopicArea:EvaluatingLocationAlternatives

55.ForwhatquantitywouldyoubeindifferentbetweenselectingsiteBorsiteC?
30,000unitsperyear
Feedback:Dividethedifferenceinfixedcostbythedifferedinvariablecost.Thisleadstothepointof
indifference.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#55
TopicArea:EvaluatingLocationAlternatives

56.ForwhatrangeofoutputwouldyouprefersiteA?
19,999
Feedback:Aisbestforverylowvolumes.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#56
TopicArea:EvaluatingLocationAlternatives

57.ForwhatrangeofoutputwouldyouprefersiteB?
10,00129,999
Feedback:Bisbestoverthemiddlerangeofvolumes.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#57
TopicArea:EvaluatingLocationAlternatives

58.ForwhatrangeofoutputwouldyouprefersiteC?
30,001andabove
Feedback:Cisbestwhenvolumeisveryhigh.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#58
TopicArea:EvaluatingLocationAlternatives

59.Whichsitewouldyoupreferforaquantityof20,000unitsperyear?
B
Feedback:Bisbestwhenvolumeisintherangeof10,001to29,999.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#59
TopicArea:EvaluatingLocationAlternatives

60.Forthepreferredsitefor20,000unitsperyear,whatwouldbeyourtotalcosts?
$280,000
Feedback:Multiplythevariablecostbythevolume,thenaddthisproducttothefixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#60
TopicArea:EvaluatingLocationAlternatives

61.Forthepreferredsitefor20,000unitsperyear,whatwouldbeyourcostsavingscomparedtoeachofthe
othertwosites?
$20,000vs.A;$10,000vs.C
Feedback:ComparetotalcostsforBtothetotalcostsforAandC.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#61
TopicArea:EvaluatingLocationAlternatives

Amanufacturingfirmisconsideringtwolocationsforaplanttoproduceanewproduct.Thetwolocations
havefixedandvariablecostsasfollows:

StevensonChapter08

62.Atwhatannualoutputwouldthecompanybeindifferentbetweenthetwolocations?
A. 60,000units
B. 15,000units
C. 10,000units
D. 20,000units
E. 4,000units
Dividethedifferenceinfixedcostbythedifferenceinvariablecost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#62
TopicArea:EvaluatingLocationAlternatives

63.WhatwouldthetotalannualcostsbeforthePhoenixlocationwithanannualoutputof10,000units?
A. $280,000
B. $140,000
C. $220,000
D. $300,000
E. $156,000
Usethetotalcostformula.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#63
TopicArea:EvaluatingLocationAlternatives

64.Whatwouldbethetotalannualcostsatthepointofindifference?
A. $300,000
B. $240,000
C. $380,000
D. $220,000
E. $760,000
Usethetotalcostformula.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#64
TopicArea:EvaluatingLocationAlternatives

65.Ifannualdemandisestimatedtobe20,000units,whichlocationshouldthecompanyselect?
A. Atlanta
B. Phoenix
C. eitherAtlantaorPhoenix
D. rejectbothAtlantaandPhoenix
E. buildatbothlocations
Comparetheoptionsbasedontotalcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#65
TopicArea:EvaluatingLocationAlternatives

66.Iftheannualdemandwillbe20,000units,whatwouldbethecostadvantageofthebetterlocation?
A. $20,000
B. $460,000
C. $480,000
D. $80,000
E. $60,000
Comparetotalcostsatthisvolume.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#66
TopicArea:EvaluatingLocationAlternatives

Alocationanalysishasbeennarroweddowntothreelocations.Thecriticalfactors,theirweights,andthe
ratingsforeachlocationareshownbelow:

StevensonChapter08

67.WhatisthecompositescoreforlocationA?
A. 76
B. 75
C. 78
D. 74
E. 76.33
MultiplyA'sscoresbytheappropriateweightingfactors.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#67
TopicArea:EvaluatingLocationAlternatives

68.WhatisthecompositescoreforlocationB?
A. 76
B. 75
C. 78
D. 74
E. 76.33
MultiplyB'sscoresbytheappropriateweightingfactors.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#68
TopicArea:EvaluatingLocationAlternatives

69.WhatisthecompositescoreforlocationC?
A. 76
B. 75
C. 78
D. 74
E. 76.33
MultiplyC'sscoresbytheappropriateweightingfactors.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#69
TopicArea:EvaluatingLocationAlternatives

70.Iftheselectioncriteriaistobethegreatestcompositescore,managementshouldchoose:
A. locationA
B. locationB
C. locationC
D. eitherBorC
E. torejectalllocations
B'scompositescoreishighest.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#70
TopicArea:EvaluatingLocationAlternatives

71.Ifthedecisionsruleistoselectthelocationwiththegreatestcompositescoreexceeding80,management
shouldchoose:
A. locationA
B. locationB
C. locationC
D. eitherBorC
E. torejectalllocations
Noneoftheoptionshastheminimumcompositescore.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#71
TopicArea:EvaluatingLocationAlternatives

AclothingmanufacturerproducesclothinginfivelocationsintheU.S.Inamovetoverticalintegration,the
companyisplanninganewfabricproductionplantthatwillsupplyfabrictoallfiveclothingplants.The
clothingplantshavebeenlocatedonacoordinatesystemasfollows:

StevensonChapter08

72.Iftheamountoffabricshippedtoeachplantisequal,whatistheoptimallocationforthefabricplant?
A. 5,5
B. 6,4
C. 4,6
D. 6,2
E. 5,4
Averagethevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#72
TopicArea:EvaluatingLocationAlternatives

73.Shipmentsoffabrictoeachplantvaryperweekasfollows:plantA,200units;plantB,400units;plantC,
300units;plantD,300units;andplantE,200units.Whatistheoptimallocationforthefabricplant?
A. 6.2,3.0
B. 6.0,4.0
C. 6.5,5.3
D. 5.6,4.4
E. 5.0,3.0
Calculateweightedaveragevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#73
TopicArea:EvaluatingLocationAlternatives

Ahardwaredistributorhasregionalwarehousesatthelocationsshownbelow.Thecompanywantstolocatea
newcentraldistributioncentertoservethiswarehousenetwork.

StevensonChapter08

74.Ifweeklyshipmentstoeachwarehousewillbeapproximatelyequal,whatistheoptimallocationforthe
distributioncenter?
A. 5,5
B. 5,4
C. 4,5
D. 5,6
E. 6,5
Averagethevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#74
TopicArea:EvaluatingLocationAlternatives

75.Weeklyshipmentstoeachwarehousewillbe:WH1,100;WH2,150;WH3,120;WH4,150;andWH5,120.
Whatistheoptimallocationofthedistributioncenter?
A. 5.1,4.2
B. 5.2,4.0
C. 5.1,5.1
D. 4.2,5.1
E. 4.9,5.2
Calculateweightedaveragevaluesforxandy.

AACSB:Analytic
Blooms:Apply
Difficulty:Medium
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#75
TopicArea:EvaluatingLocationAlternatives

76.Whichofthefollowingcircumstanceswouldbeleastlikelytoleadtoaneedforanewlocation?
A. Shiftingofmarkets.
B. Depletionofbasicinputs.
C. Growthindemandthatisleadingtogreaterutilizationofexistingcapacity.
D. Theneedtoexpandintonewmarkets.
E. Theopportunitytotakeadvantageofglobalizationtrends.
Greaterutilizationdoesnotnecessarilymeanthatnewcapacityisneeded.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0801Identifysomeofthemainreasonsorganizationsneedtomakelocationdecisions.
StevensonChapter08#76
TopicArea:TheNeedforLocationDecisions

77.Whichofthefollowingisleastimportantasaconsiderationforafirmatthebeginningofasupplychain?
A. Accesstoendconsumers
B. Accesstoresources
C. Proximitytocustomers
D. Accesstotransportationinfrastructure
E. Accesstoproductivelabor
Firmsatthebeginningofthesupplychainarefarremovedfromfinalconsumers.

AACSB:ReflectiveThinking
Blooms:Remember
Difficulty:Easy
LearningObjective:0802Explainwhylocationdecisionsareimportant.
StevensonChapter08#77
TopicArea:TheNatureofLocationDecisions

78.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.Whatwouldits
totalcostbeatamonthlyvolumeof250units?
A. $105,200
B. $102,500
C. $100,250
D. $100,520
E. $105,500
Multiplythevolumebythevariablecost,thenaddtofixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#78
TopicArea:EvaluatingLocationAlternatives

79.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.Whatwouldits
totalcostbeatamonthlyvolumeof550units?
A. $105,200
B. $102,500
C. $100,250
D. $100,520
E. $105,500
Multiplythevolumebythevariablecost,thenaddtofixedcost.

AACSB:Analytic
Blooms:Apply
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#79
TopicArea:EvaluatingLocationAlternatives

80.LocationchoiceIhasmonthlyfixedcostsof$100,000andperunitvariablecostsof$10.LocationchoiceJ
hasmonthlyfixedcostsof$150,000andperunitvariablecostsof$9.Atwhatvolumewouldtheselocations
haveequaltotalcosts?
A. 30,000units
B. 25,000units
C. 40,000units
D. 50,000units
E. 60,000units
Dividethedifferenceinfixedcostsbythedifferenceinvariablecosts.

AACSB:Analytic
Blooms:Apply
Difficulty:Easy
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
StevensonChapter08#80
TopicArea:EvaluatingLocationAlternatives

ch8Summary
Category
#ofQuestions
AACSB:Analytic
38
AACSB:ReflectiveThinking
42
Blooms:Apply
38
Blooms:Remember
37
Blooms:Understand
5
Difficulty:Easy
22
Difficulty:Hard
5
Difficulty:Medium
53
LearningObjective:0801Identifysomeofthemainreasonsorganizationsneedtomakelocationdecisions.
3
LearningObjective:0802Explainwhylocationdecisionsareimportant.
3
LearningObjective:0803Discusstheoptionsthatareavailableforlocationdecisions.
6
LearningObjective:0804Giveexamplesofthemajorfactorsthataffectlocationdecisions.
14
LearningObjective:0805Outlinethedecisionprocessformakingthesekindsofdecisions.
4
LearningObjective:0806Usethetechniquespresentedtosolvetypicalproblems.
50
StevensonChapter08
86
TopicArea:EvaluatingLocationAlternatives
49
TopicArea:GeneralProceduresforMakingLocationDecisions
3
TopicArea:GlobalLocations
3
TopicArea:IdentifyingaCountry,Region,CommunityandSite
12
TopicArea:ServiceandRetailLocations
5
TopicArea:TheNatureofLocationDecisions
7
TopicArea:TheNeedforLocationDecisions
1