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Exam 8: Location Strategies

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Question 21

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How do service facility location decisions differ from industrial location decisions in terms of the techniques used to analyse them?

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Service location decisions tend to focus...

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Question 22

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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. $\begin{array} { | l | r | r | r | } \hline & { \text { A } } & { \text { B } } &{ \text { C } } \\\hline \text { Fixed cost } & 270000 & 245000 & 30000 \\\hline \text { Variable cost } & 23 & 26 & 20 \\\hline\end{array}$

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B is cheapest up to 8,333 unit...

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Question 23

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Traffic counts and purchasing power analysis of drawing area are techniques associated with

Which of the following statements regarding "proximity" in the location decision is false?

Evaluating location alternatives by comparing their composite (weighted-average) scores involves

An employee produces 15 parts during a shift in which he made $90. The labour content of the product is

A regional bookstore chain is about to build a distribution centre that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis?

When firms build supply chains that include foreign firms, ________ and ________ are issues that raise ethical and legal concerns with operations managers.

Industrial firms choose locations that minimize cost, but service firms look for locations with good demographics and traffic count because these variables are indicators of good ________.

Is Starbucks Coffee a user of Geographic Information Systems? Support your answer with examples.

What is the impact of exchange rates on location decisions?

Which of the following statements regarding FedEx is true?

LaQuinta Motor Inns has a competitive edge over its rivals because it

FedEx chose Memphis, Tennessee, as its U.S. hub because

The owner of a millwork shop is considering three alternative locations for a new plant for building embossed-and-clad steel exterior doors for residences. Fixed and variable costs follow. Since the plant ships nationwide, revenue is assumed the same regardless of plant location. Plot the total cost lines in the chart provided below, and identify the range over which each location is best. $\begin{array} { | l | c | c | c | } \hline & { \text { Location } } \\\hline \text { Costs } & \mathrm { A } & \mathrm { B } & \mathrm { C } \\\hline \text { Fixed } & \$ 700,000 & \$ 1,000,000 & \$ 1,1000,000 \\\hline \text { Variable } & \$ 28 & \$ 18 & \$ 20 \\\hline\end{array}$

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 6,950 units, which location would be more attractive? $\begin{array} { | l | l | r | } \hline & \text { West } & \text { East } \\\hline \text { Fixed cost } & 137500 & 162300 \\\hline \text { Variable cost } & 17.5 & 14.3 \\\hline\end{array}$

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. $\begin{array} { | l | l | l | l | } \hline \text { Factor } & \text { Weight } & \text { Gary Mall } & \text { Belt Line } \\\hline \text { Affluence of local population } & 20 & 30 & 30 \\\hline \text { Traffic flow } & 40 & 50 & 20 \\\hline \text { Parking availability } & 20 & 30 & 40 \\\hline \text { Growth potential } & 20 & 10 & 30 \\\hline\end{array}$ The score for Gary Mall is ________ and the score for Belt Line is ________.

A farmers' cooperative association plans to build a new grinding mill in Southern Manitoba. 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 centre-of-gravity method is appropriate for this objective. While there are over 200 wheat farms in the region, they are tightly clustered around four villages. Using the data below, use the centre-of-gravity method to calculate the coordinates of the best location for this mill. On the grid below, plot the location of the four farm clusters and the calculated mill location. All mileage references use the city of Brandon as (0,0). $\begin{array} { | l | r | r | r | } \hline & \text { Tonnes } & \text { KMS east of Brandon } & \text { KMS south of Brandon } \\\hline \text { Wawanesa } & 57000 & 51 & 66 \\\hline \text { Baldur } & 41500 & 77 & 102 \\\hline \text { Trehern } & 37500 & 311 & 195 \\\hline \text { Glennboro } & 81000& 127 & 61 \\\hline\end{array}$

In location decisions, intangible costs are easier to measure than tangible costs.

Why is "quality of life" an element of intangible costs associated with location decisions? Provide an example as part of your discussion.