File: chS7, Supplement 7: Decision-Making Tools: Facility Location Models

True/False

1. The factors used to evaluate location of a manufacturing plant are usually different
from the factors used in locating a service facility.

Ans: True
Difficulty: Easy
Feedback: Site Selection: Where to Locate

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2. Railroad access is frequently a factor in locating a manufacturing plant.

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Ans: True
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Difficulty: Easy
Feedback Site Selection: Where to Locate
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3. Service facilities are usually the largest and most expensive type of facility.
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Ans: False
Difficulty: Easy
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Feedback Site Selection: Type of Facility

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4. For a service operation being in the right place usually means being in a location that
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is convenient and easily accessible.

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Ans: True
Difficulty: Easy
Feedback Site Selection: Where to Locate

5. Service operations tend to make location decisions more frequently than

manufacturing facilities.

Ans: True

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 Difficulty: Easy
Feedback Types of Facilities

6. One reason foreign firms locate facilities in the United States is to reduce their supply
chain costs.

Ans: True
Difficulty: Easy
Feedback Global Supply Chain Factors

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7. The cost and availability of labor is an important factor in a location decision.

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Ans: True

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Difficulty: Easy
Feedback Site Selection: Where to Locate

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8. A location’s collection of physical support systems is known as its infrastructure.
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Ans: True
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Difficulty: Moderate
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Feedback Types of Facilities

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9. Inadequate infrastructure at a given location increases supply chain costs and

decreases customer service.

Ans: True
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Difficulty: Moderate
Feedback Types of Facilities
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10. Transportation costs are generally a function of distance, weight, and time.

Ans: True
Difficulty: Easy
Feedback Site Selection: Where to Locate

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 11. The center of gravity technique outlines a method for identifying and weighing
important location factors.

Ans: False
Difficulty: Moderate
Feedback: Location Analysis Techniques

12. The load-distance technique evaluated different locations based on load and transport
distance.

Ans: False

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Difficulty: Moderate

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Feedback: Location Analysis Techniques

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13. Facility location is often overlooked because it is not an important aspect of a firm’s
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strategic plan.

Ans: False
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Difficulty: Moderate
Feedback: Site Selection: Where to Locate
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Multiple Choice
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14. Which of the following is not a primary factor in location decisions for manufacturing
plants?
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a. proximity to raw materials

b. proximity to customers
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c. proximity to different modes of transportation

d. proximity to significant labor pools

Ans: b
Difficulty: Moderate
Feedback: Site Selection: Where to Locate

15. Common location incentives include all of the following except

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 a. tax credits.
b. job training.
c. fixed exchange rates.
d. improvements to infrastructure.

Ans: c
Difficulty: Moderate
Feedback: Site Selection: Where to Locate

16. A company is deciding where to locate a new warehouse that will receive shipments
from three suppliers: 1, 3, and 3. The locations of the suppliers (xi, yi) and the annual
number of shipments from supplier i (Wi) are provided below:

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1 2 3

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x1 = 250 x2= 100 x3= 500

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y1 = 250 y2= 400 y3= 300

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The coordinates for the new warehouse suggested by the center of gravity method are
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a. x = 311.4 and y = 309.4

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b. x = 309.4 and y = 311.4

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c. x = 291.2 and y =198.9

d. x = 193.2 and y = 219.4

Ans: b
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Difficulty: Hard
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Feedback: Location Analysis Techniques

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17. A package delivery service wants to build a new distribution center in Boise, Idaho.
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The location of the center needs to be in the vicinity of Interstate-84,/Highway-55 and

the Boise Airport. The following table provides the coordinates of these three sites
and the number of weekly packages.

I-84 Highway-55 Airport

x = 20 x = 26 x = 36
y = 35 y = 13 y = 19
W = 16,000 W = 11,000 W = 8,000

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 The suggested coordinates for the new warehouse using the center of gravity method
are
a. x = 36.0 and y = 35.0
b. x = 27.3 and y = 22.3
c. x = 25.54 and y =24.4
d. x = 27.5 and y = 35.5

Ans: c
Difficulty: Hard
Feedback: Location Analysis Techniques

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18. Which type of facility is large and expensive?

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a. light-industry facilities
b. retail and service facilities

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c. heavy-manufacturing facilities
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d. medium-site facilities
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Ans: c
Difficulty: Easy
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Feedback: Types of Facilities

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19. The region experiencing the most growth in manufacturing facilities is currently the
a. Northeast.
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b. West.
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c. South.
d. Midwest.
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Ans d
Difficulty: Easy
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Feedback: Site Selection: Where to Locate

20. ___________ attracts manufacturing facilities because of its transportation, skilled

labor, strong work ethic, incentive programs and social services?
a) Kansas
b) Arkansas
c) Ohio
d) Idaho

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 Ans: c
Difficulty: Easy
Feedback: Site Selection: Where to Locate

21. A technique based on transport weight and distance used for locating a facility at the
center of movement in a geographic area is known as the
a) load-distance technique.
b) center of gravity technique.
c) location factor rating.
d) location factor technique.

Ans: b

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Difficulty: Moderate

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Feedback: Location Analysis Techniques

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22. Which of the following is a type of facility addressed by the facility location
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decision?
a. heavy manufacturing
b. light manufacturing
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c. retail facilities
d. all the above
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Ans: d
Difficulty: Moderate
Feedback: Types of Facilities
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23. Which of the following is not a facility location factor important in selecting a
country?
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a. Government stability
b. Export and import tariffs
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c. Customer service
d. Culture

Ans: c
Difficulty: Moderate
Feedback: Global Supply Chain Factors

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