CHAPTER 8: LOCATION STRATEGIES
TRUE/FALSE
1.FedEx chose Memphis, Tennessee, for its central location, or "hub," primarily because of the
incentives offered by the city of Memphis and the state of Tennessee.
False (Global company profile, easy)
2.Generally, the objective of the location decision is to maximize the firm's profit.
False (The strategic importance of location, easy)
3.Lists have been developed that rank countries on issues such as “competitiveness” and
“corruption.”
True (Factors that affect location decisions, easy)
4.When innovation replaces cost as a firm's focus for location decisions, the presence of other state-
of-the-art firms is a plus, not a negative, for the firm's competitiveness.
True (The strategic importance of location, moderate)
5.The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.
True (Factors that affect location decisions, moderate)
6.For a location decision, labor productivity may be important in isolation, but low wage rates are a
more important criterion.
False (Factors that affect location decisions, moderate)
7.Unfavorable exchange rates can offset other savings in a location decision.
True (Factors that affect location decisions, moderate)
8. An example of an intangible cost, as it relates to location decisions, is the quality of education.
True (Factors that affect location decisions, moderate)
9.In location decisions, intangible costs are easier to measure than tangible costs.
False (Factors that affect location decisions, moderate)
10.Location decisions are based on many things, including costs, revenues, incentives, attitudes, and
intangibles, but not on ethical considerations.
False (Factors that influence location decisions, easy) {AACSB: Ethical Reasoning}
11.Manufacturers may want to locate close to their customers, if the transportation of finished goods is
expensive or difficult.
True (Factors that affect location decisions, moderate)
12.One reason for a firm locating near its competitors is the presence of a major resource it needs.
True (Factors that affect location decisions, moderate)
13.The graphic approach to location break-even analysis displays the range of volume over which
each location is preferable.
True (Methods of evaluating location alternatives, moderate)
189
The center-of-gravity method finds the location of a centralized facility such as a distribution center that will maximize the organization’s revenue. The transportation model calculates an optimal shipping system between a central facility and several outlying customers. The Center of Gravity Method is an approach that seeks to compute geographic coordinates for a potential single new facility that will minimize costs. It’s an approach where the main inputs that it considers are the following: Markets.
Volume of goods shipped. Shipping costs. The center of gravity method is used for locating single facilities that considers existing facilities the distances between them and the volumes of goods to be shipped between them. The center of gravity method: Method for locating a distribution center that minimizes distribution cost. It is a method to determine the location of a facility that will minimize shipping costs or travel time to various destinations. When businesses locate near similar businesses it is referred to as:
clustering. Location analysis techniques typically employed by service organizations include: the factor rating method. the center-of-gravity method. purchasing power analysis of area. Using the Method: See also what do you think some density-dependent limiting factors might be? Centre of gravity: The centre of gravity is a theoretical point in the body where the total weight of the body is thought to be concentrated. The centre of gravity of
a body is a point where the total gravitational torque on the body is zero. Facility Location is the right location for the manufacturing facility it will have sufficient access to the customers workers transportation etc. … A manufacturing unit is the place where all inputs such as raw material equipment skilled labors etc. What is the precise mathematical goal/objective of the center of gravity method for facility location? The goal/objective of this method for facility
location is to find the coordinates that minimize a loss function that corresponds to the weighted squared euclidean distance. General Procedure for making Location Decisions.
1.What is a center of gravity method?
What is center of gravity method of plant location?
What is the center of gravity method quizlet?
Which of the following is a location analysis techniques typically?
How do you find the center of gravity method?
What is the center of gravity method Mcq?
How do you find the center of gravity in Excel?
What is meant by facility location?
What is the precise mathematical goal objective of the center of gravity method for facility location?
What are the steps in the general procedure for making location decisions quizlet?
…
- Must address supply chain configuration.
- The location of these facilities can involve a long-term commitment of resources so known risks and benefits should be considered carefully.
- A related issue is whether to have centralized or decentralized distribution.
What is the importance of location decision?
Location plays a huge role in attracting and retaining the best employees many of whom keep a close eye on where they’re based in order to optimize work-life balance. Good location decisions can significantly boost a company’s long-term performance. Poor ones can cost millions in lost talent productivity and capital.
Which of the following is a factor commonly considered when determining a facility location?
The seven factors affecting a location decision in operations management are facilities competition logistics labor community and site political risk and incentives according to Reference for Business.
Is a technique that incorporates both tangible and intangible factors in location decisions?
Break-even analysis of location decisions considers both tangible and intangible cost factors.
What is factor rating method and how it supports location decision?
Factor Rating
This method involves qualitative and quantitative inputs and evaluates alternatives based on comparison after establishing a composite value for each alternative.
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How Load distance method is different from center of gravity method?
However for load-distance method a rough calculation that is either Euclidean or rectilinear distance measure may be used. Euclidean distance is the straight-line distance or shortest possible path between two points. Centre of gravity is based primarily on cost considerations.
What is the position of centre of gravity of a cylinder?
For a uniform regular structure the centre of gravity will be at its body centre that is the middle of the cylinder. For a cylinder the centre of the body will be at the centre of its axis. So the centre of gravity also will be at the mid-point on the axis of the cylinder.
Where will be the centre of gravity of a uniform rod line?
The centre of gravity of a uniform rod will lie at the middle point. Centre of gravity is an imaginary point at which weight of the object is taken as the average.
Why center of gravity is important?
The Centre of gravity is a theoretical point in the body where the body’s total weight is thought to be concentrated. It is important to know the centre of gravity because it predicts the behaviour of a moving body when acted on by gravity. It is also useful in designing static structures such as buildings and bridges.
What is centre of gravity with example?
The definition of center of gravity is the place in a system or body where the weight is evenly dispersed and all sides are in balance. An example of center of gravity is the middle of a seesaw. … The center of mass of an object in the presence of a uniform gravitational field.
How do you find the center of gravity using integration?
What are the facility location methods?
PLANT LOCATION MODELS – Production and Operations Management
- Factor rating method.
- Weighted factor rating method.
- Load-distance method.
- Centre of gravity method.
- Break even analysis.
What is deciding where to locate facilities in operations management?
Facility location is the process of determining a geographic site for a firm’s operations. Managers of both service and manufacturing organizations must weigh many factors when assessing the desirability of a particular site including proximity to customers and suppliers labor costs and transportation costs.
What are the primary regional factors in location decisions?
Regional characteristics constitute our independent variables. Several groups of location factors can be pointed out : labor market conditions market access public policy variables and agglomeration related factors. The role of labor costs has been widely developed in the literature on location choice.
What is location factor rating method?
Factor Rating Method for Location Planning
Identify the important location factors. Rate each factor according to its relative importance e. higher the ratings is indicative of prominent factor. Assign each location according to the merits of the location for each factor.
What are location decision models?
An AHP location decision model is developed in this research. The location decision is addressed from the perspective of the organizations seeking a site for a new facility or a relocation of an existing facility. Both qualitative and quantitative location factors are considered in the model.
Which of the following is a step in the procedure for making location decisions?
As with capacity planning managers need to follow a three-step procedure when making facility location decisions.
…
Procedure for Making Location Decisions
- Step 1 Identify Dominant Location Factors. …
- Step 2 Develop Location Alternatives. …
- Step 3 Evaluate Location Alternatives.
See also what is economic success
In what ways can the location decision have an impact on the production system?
Ans1) The location decisions has an impact on the production system because whether the available resource will be available to the firm or not and transportation cause will also be high if the raw materials will able to nearer it. The firm will have to ordered it will take more time for production.
Which of the following are the main options generally considered by managers in location planning of existing companies?
which of the following are the main options generally considered by managers in location planning of existing companies? decide identify develop evaluate.
What is location Type?
Location is a type that contains latitude longitude and address. It may be accessed as an object with 3 keys in it. These keys are: The latitude of the location.
What is location analysis?
Location analysis is the study and development of models techniques and tools to provide decision makers with good solutions to realistic locational decision problems.
What are the techniques used by industrial organizations to select locations?
The main macro analysis techniques are factor-rating systems linear programming and center of gravity. Factor-rating systems are among the most commonly used techniques for choosing a location because they analyze diverse factors in an easily comprehensible manner.
Which of the following are factors that can help determine where an Organisation will locate its facilities choose three?
Let us discuss these in some details.
- (i) Availability of Raw Materials:
- (ii) Proximity to Market:
- (iii) Infrastructural Facilities:
- (iv) Government Policy:
- (v) Availability of Manpower:
- (vi) Local Laws Regulations and Taxes:
- (vii) Ecological and Environmental Factors:
- (viii) Competition:
What factors should a manager consider when evaluating a region in which to locate a business?
Entrepreneur Jake Fox reveals the key factors a business needs to consider when selecting a new location.
- Accessibility. Does your business rely on frequent deliveries? …
- Security. …
- Competition. …
- Business Rates. …
- Skill base in the area. …
- Potential for growth.