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MSIS 3223 Operations Management Ch. 8

t/f : The location of many businesses is often the function of where the originator was located at the time the business was started.
True
t/f: Zoning and land costs can be key regional considerations in a location analysis
False
t/f: Regional Factors can include location of markets or location of raw materials,
True
t/f: Factors used in location analysis for services and manufacturing are often quite similar.
False
t/f: The benefits of having global locations generally outweigh the disadvantages.
False
t/f: Companies may seek global locations to overcome miscommunication and cultural differences
False
t/f: Factor rating includes both qualitative and quantitative inputs.
True
t/f: In the factor rating system, the most important factor is given a rating if 10, and the less important factors are given lower ratings.
False
t/f: The center of gravity method is used to minimize travel distances.
True
t/f: A breakeven point in a location analysis is where the location alternatives have the same total cost.
False
t/f: The transportation model is used to decide which form of transportation will minimize costs.
False
t/f: The center of gravity method treats shipping cost as a linear function of the sipping distance.
True
t/f: A microfactory is a small factory that has a narrow product focus and is located near major markets.
True
t/f: Climate and taxes are often key site considerations in location planning.
False
t/f: When businesses of the same type locate near similar businesses, that is referred to as clustering.
True
t/f: In location analysis, service organizations tend to be revenue focused, whereas manufacturers tend to be cost focused
True
The first step in location planning and analysis is:
a) develop a reasonable set of alternatives
b) determine the criteria upon which the decision will be made
c) identify factors that are important
b) determine the criteria upon which the decision will be made
Which statement about location decisions is NOT true?
a) Mistakes can be difficult to overcome
b) The goal is to find the optimal location
c)Both fixed and variable costs can be affected
d) decisions are often long term
b) The goal is to find the optimal location
Multiple plant manufacturing strategies include all of these except:
a) product plant
b) process plant
c) market area plant
d) core plant
d) core plant
Which reason would not generally be cited for locating in a third world country?
a) nearness to raw materials
b) lower labor costs
c) increased output quality
d) nearness to markets
c) increased output quality
Which reason is not usually listed as a regional factor in location decisions?
a) taxes
b) nearness to raw materials
c) labor costs
d) nearness to markets
a) taxes
The tool that provides demographic information for analysis is:
a) factor rating method
b) geographic information system
c) center of gravity
d) transportation model
b) geographic information system
Location planning for secondary schools would most likely focus on factors of a
a) region
b) community
c) cite
c) cite
t/f: The transportation problem involves identifying minimum-cost distribution plan
True
t/f: Supply and demand are constraints of the transportation model
True
t/f: The number of origins and the number of destinations in a transportation problem must be equal.
False
t/f: Unit shipping costs are the coefficients of the objective function.
True
t/f: Total supply and total demand are equal in a transportation model
True
t/f: There is one constraint for each supply location and one constraint for each demand location
True
t/f:In a transportation table, the rows represent demand and the columns represent supply
False
t/f:The transportation model assumes that items to be shipped are homogeneous
True
t/f: If the quality is assigned to a dummy destination, it can be shipped at zero cost per unit
False
t/f: Unit shipping costs may be linear, but all other values are assumed to be linear.
False
t/f: The transportation model has applications besides location problems
True
A dummy origin is used when:
a) unit shipping cost is zero
b) an alternate optimal solution occurs
c) total supply is less than total demand
d) the quality if the supply of an origin is unknown
c) total supply is less than total demand
Which one is NOT an assumption of the transportation model?
a) all items are the same, regardless of their source
b) unit shipping costs are the same regardless of the quantity shipped
c) there is only one mode of transportation between a given origin and destination
d) both a dummy origin and a dummy destination may be needed to equate supply and demand
d) both a dummy origin and a dummy destination may be needed to equate supply and demand
Manual solution of a transportation problem involves evaluating
a) complete cells
b) empty cells
c) all cells
d) all cells except dummy cells if there are any
b) empty cells
In a manual solution, an alternate optimal solution exists when a cell evaluation is
a) zero
b) positive
c) negative
d) cannot be determined
a) zero
Changing the unit cost of a cell will change the total cost of the solution
a) not necessarily
b) always
c) never
a) not necessarily
In which case would the transportation model NOT be used?
a) unit shipping costs are all equal within a row
b) there is only a single source of supply and supply and demand are equal
c) total supply does not equal total demand
d) the number of rows and columns is not equal
b) there is only a single source of supply and supply and demand are equal
Manual techniques for identifying an optimal solution involve all but
a) evaluating empty cells
b) an iterative process
c) progressive improvements in solutions
d) elimination of unimportant variables
d) elimination of unimportant variables
Unless a solution us degenerate, the number if occupied cells in a transportation table must equal:
a) the number if rows plus the number of columns
b) the number of rows times the number of columns
c) the number of rows plus the number of columns minus one
d) none of these
c) the number of rows plus the number of columns minus one
Which one is NOT a solution technique for a transportation problem?
a) northwest corner method
b) VAM
c) computer solution
d) transportation table
d) transportation table
t/f: Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition
False
t/f: Technology has made communication with global operations easier
True
Which of the following is not a location option that management can consider in location planning?
a) relocate
b) do nothing
c) expand existing facility
d) add a new location
e) all are possible options
e) all are possible options
Which of the following would be lease likely to lead to a need for a new location?
a) depletion of basic inputs
b) the opportunity to take advantage of globalization trends
c) growth in demand that is leading to greater utilization of existing capacity
d) the need to expand into new markets
c) growth in demand that is leading to greater utilization of existing capacity

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