What factors influence firms in their decision about where to locate operations quizlet?

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Terms in this set (28)

Which of the following is the correct formula for the unweighted center of gravity method?

X-bar = sigma(Xi) / n
Y-bar = sigma(Yi) / n

Which of the following are the main options in location planning?

- Add new locations while keeping existing ones.
- Do nothing.
- Shut down one location and move to another.
- Expand existing facilities.

Steps of the locational cost-profit-volume analysis (correct order)

1. Determine the fixed and variable costs associated with each alternative.
2. Plot the total-cost lines for all alternatives on the same graph.
3. Determine which location has the lowest total cost (or highest profit) at the expected output levels.

Clustering refers to ____________ types of businesses locating in the same area. They do this because of ____________ traffic volumes and ____________ to customers.

Similar
Higher
Convenience

Which of the following statements about location decisions are not true?

A business at the end of the supply chain is often located near raw materials.

Location decisions:
- Central distribution locations are often chosen to minimize distribution costs.
- Web-based businesses are much less dependent on location than traditional businesses are.
- Profit-oriented businesses tend to base their location decisions on profit potential.

Steps for factor rating (correct order)

1. Determine which factors are relevant.
2. Assign a weight to each factor.
3. Decide on a common scale for all factors.
4. Score each location alternative.
5. Multiply the factor weight by the factor score. Add the results for each alternative.
6. Choose the alternative that has the highest composite score.

Which of the following statements about location planning are true?

- Transportation costs can be a major factor for manufacturing companies.
- Services often try to locate in close proximity to their market.
- Abundant energy supplies can be important for manufacturing companies.

Small firms tend to make location decisions ____________, based on owner preferences. Larger companies tend to use ____________ approaches and to consider a larger number of ____________ possibilities.

Informal
Formal
Geographic

Which of the following is not a risk associated with globalizing operations?

- Increased security at borders can slow shipments.
- Low labor productivity.

Risks associated with globalizing operations:
- Possible terrorism deterring domestic personnel from travel.
- Economic instability.
- Corruption and bribery.
- Political instability.
- Changes in legal environment removing previous benefits.
- Cultural differences.

Which of the following are possible benefits of globalizing operations?

- Companies can avoid impact of currency changes.
- Market expansion leading to greater demand.

While ____________ agreements and technology have facilitated global operations, leading to increased ____________ and possible cost savings, there are also disadvantages such as high transportation costs and risks such as political instability.

Trade
Demand

Which are the four general plant strategies when a company has a multiple manufacturing plants?

1. Product plant
2. Market area plant
3. Process plant
4. General-purpose plant

Which of the following are reasons companies may choose to locate manufacturing facilities in other countries?

- Low wage rates
- Avoid taxes through transfer pricing rules
- Delay paying taxes on profits

Steps for making location decisions (correct order)

1. Decide on evaluation criteria.
2. Identify important factors.
3. Develop location alternatives.
4. Evaluate alternatives and make a decision.

Centralized distribution tends to lead to ____________ of scale, while decentralized distribution tends to be more ____________ to local needs.

Economies
Responsive

Which of the following statements about community identification is not true?

Communities like attracting any business because of the increased tax revenue.

Community identification:
- Companies may be concerned about the desirability of a community for its employees.
- Availability of utilities can impact a business's decision to locate in a community.

Which of the following is not a strategic implication of location decisions?

Impact availability of finished goods.

Strategic implications of location decisions:
- Impact operating costs.
- Impact availability of raw materials.
- Impact company flexibility.

Which of the following are disadvantages of globalizing operations?

- Import restrictions
- Transportation costs

____________ and ____________ sometimes play a role in location decisions. For example, severe winters can cause transportation delays. Some states try to attract business by offering tax revenues.

Climate
Taxes

True or false: It is not possible to find more than one additional location at a time using the transportation model.

False

Which of the following statements about site selection are true?

- Customer service facilities could consider industrial parks as locations.
- Land, transportation, and zoning are the primary consideration in site selection.

Geographic Information Systems are ____________ tools that are used to display data on ____________. They can be used to analyze customer, demographic, and sales data in addition to a variety of other information types.

Computer-based
Maps

Which of the following is not an issue associated with managing global operations?

Need to operate using the local currency.

Issues associated with managing global operations:
- Increased travel cost and time.
- Coordination of remote operations.
- Miscommunication because of cultural differences.

Which of the following are the primary regional factors in identifying regions?

1. Raw materials
2. Markets
3. Labor

Which of the following statements about the market location factors for identifying a region is not true?

Regardless of business type, proximity to the market is critical.

Market location factors for identifying a region:
- Many foreign car manufacturers have opened plants in the U.S. because it is a major market for their products.
- Nonprofit organizations choose locations relative to the needs of their constituents.
- Locating away from the competition is not always a good idea.

Land costs can be ____________ important than existing utility capacity and the room for future ____________.

Less
Growth

Which of the following are the three primary reasons companies locate near the source of raw materials?

1. Necessity
2. Perishability
3. Transportation costs

Which of the following statements about labor factors in regional identification is not true?

Cost of labor is the overriding factor.

Labor factors in regional identification:
- Worker attitudes toward absenteeism are very important.
- Unionization in the area could lead to a potential problem.
- Labor productivity is a serious concern.

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What is the major factors affecting location decision?

Which of the following is not the factors influencing location determination?

Which factors would be most important in selecting the location of a new manufacturing plant?

Which of the following is the first step in the location decision process?