SOLVED

Section 3Â Â Methods of Evaluating Location Alternatives 1) The graphic approach to locational cost-volume analysis displays the range of volume over which each location is preferable. 2) The factor-rating method can consider both tangible and intangible costs. 3) The center-of-gravity method finds the location of a centralized facility, such as a distribution center, that will maximize the organization’s revenue. 4) The transportation model calculates an optimal shipping system between a central facility and several outlying customers. 5) Which of the following statements regarding the center-of-gravity method is FALSE? A) It is designed to minimize the maximum possible travel distance to any of the locations. B) The optimal x- and y-coordinates are calculated separately. C) The optimal solution is unconstrained, so it could suggest a location in the middle of a body of water. D) The weights used are the quantity of goods moved to or from each location. E) The origin of the coordinate system and the scale used are arbitrary, just as long as the relative distances are correctly represented. 6) Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in which of the following location decision methods? A) transportation method B) locational cost-volume analysis C) center-of-gravity method D) simulation E) factor-rating method 7) Which of the following methods best considers intangible costs related to a location decision? A) crossover methods B) locational cost-volume analysis C) factor-rating method D) the transportation method E) center-of-gravity method 8) Evaluating location alternatives by comparing their composite (weighted-average) scores involves which of the following? A) factor-rating analysis B) cost-volume analysis C) transportation model analysis D) linear regression analysis E) crossover analysis 9) A clothing chain is considering two different locations for a new retail outlet. They have identified the four factors listed in the following table as the basis for evaluation, and have assigned weights as shown. The manager has rated each location on each factor, on a 100-point basis, as shown under the respective columns for Barclay and Chester. Factor Factor Description Weight Barclay Chester 1 Average community income .40 30 20 2 Community growth potential .25 40 30 3 Availability of public transportation .15 20 20 4 Labor cost .20 10 30 What is the score for Chester? A) 10.00 B) 24.50 C) 25.75 D) 27.00 E) 100.00 10) What is an approach to location analysis that includes both qualitative and quantitative considerations? A) locational cost-volume analysis B) factor-rating method C) transportation model D) center-of-gravity method E) make-or-buy analysis