Operations Management: Processes and Supply Chains, 12e (Krajewski)
1) If the customer must be physically present at the process, location is an important issue.
2) Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high
impact on the company’s ability to meet its goals and the factors themselves must be affected by the location
decision.
3) When outbound transportation costs are a dominant factor, manufacturing facilities should be located close
to suppliers and resources needed for production.
4) One dominant factor in locating manufacturing facilities is a favorable labor climate.
5) Traffic flows are one dominant factor in locating manufacturing location.
6) Service location decisions are driven primarily by the operating costs at the locations under consideration.
7) Many firms are concluding that large, centralized manufacturing facilities in low-cost countries with
poorly trained workers are not sustainable.
8) Critical mass is a situation whereby several competing firms cluster near one location, and thus attract
more customers than the total number who would shop at the same stores in scattered locations.
9) More than 80 percent of all relocations are within 10 miles of the first location, so usually the existing
workforce is displaced.
10) Repeated onsite expansion ultimately leads to diseconomies of scale.
11) When comparing several sites, typically a company will pick specific available site locations, then broaden
their choices to communities, and finally to alternate regions.
12) On average, it is less expensive to relocate a service-oriented business than a manufacturing business.
13) An important factor for locating new manufacturing plants is:
A) proximity to customers.
B) location of competitors.
C) proximity to markets.
D) favorable labor climate.
14) A favorable labor climate might include all of the following except:
A) a good work ethic.
B) no union presence.
C) high average wages.
D) an educated work force.
15) Quality of life issues include:
A) proximity to markets.
B) prevailing wage rates.
C) local and state taxes.
D) recreational facilities.
16) Which of the following location factors was not found to dominate location decisions for new U.S.
manufacturing plants?
A) proximity to the parent company‘s facilities
B) quality of life
C) proximity to competitors’ facilities
D) favorable labor climate
17) Which of the following statements about locating facilities in the service sector is best?
A) The factors that apply to manufacturing firms often also apply to service facilities, but the impact of the
location on sales and customer satisfaction is an important addition.
B) Management should avoid locating facilities where competitors are already well established, as illustrated
by new car showrooms.
C) Creating a critical mass is a strategy that avoids locating near competing firms.
D) “Site specific” factors are the main reason for locating warehousing and distribution operations near the
customer.
18) What are the dominant factors that a manufacturing firm must consider when making a location decision?
19) Consider any two factors that a service operation assigns the greatest weight when making a location
decision. Using those two factors, identify one local service operation that likely used one of those factors as
their top priority and a different service operation that likely used the other of your two factors as their
dominant criterion. Briefly describe the business and justify your assignment of each factor as the overriding
concern.
1) The center of gravity method considers a greater number of location factors than the break-even analysis.
2) When using the load-distance method to select a new location, the decision maker can represent the
number of trips to be made, the number of customers needing a physical presence, or number of tons per
week, among other measures, as loads.
3) A quantitative method used to evaluate single locations based primarily on proximity is:
A) break-even analysis.
B) the transportation method.
C) a preference matrix.
D) the load-distance method.
4) Which of these is most likely to be classified as a “load” when using the load–distance model?
A) a process
B) a supplier
C) a shipment
D) a customer
5) The load-distance model is used to minimize the total:
A) number of loads.
B) distance traveled.
C) cost of doing business.
D) profit of competitors.
6) The center of gravity technique does not take into consideration the:
A) total volume of product any given site receives.
B) location of any given site.
C) number of locations that must be served.
D) balance of supply and demand.
Table 13.1
Four departments are located in adjacent bays in the same loading dock. The distance between adjacent bays
is 30 feet, the distance between bays separated by another (Alpha and Charlie, Bravo and Delta) is 60 feet, and
the distance between Alpha and Delta is 90 feet. Material flows (loads) between departments are shown in the
Table below.
To
To
To
To
From
Alpha
Bravo
Charlie
Delta
Alpha
0
15
20
30
Bravo
5
0
12
8
Charlie
10
7
0
4
Delta
15
24
6
0
7) Use the information from Table 13.1. Calculate the load distance for location Alpha.
A) 2,100
B) 6,450
C) 4,350
D) 2,250
8) Use the information from Table 13.1. Calculate the load distance for location Bravo.
A) 3,090
B) 3,300
C) 2,100
D) 1,200
9) Use the information from Table 13.1. Calculate the total load distance for this layout.
A) 3,930
B) 18,480
C) 9,240
D) 12,660
Table 13.2
A single facility is needed to meet the demands of four markets. The locations and demands of these four
markets are shown below.
Market
Coordinates
Demand
A
(8, 6)
10
B
(4, 12)
15
C
(3, 2)
10
D
(9,6)
6
10) Use the information from Table 13.2. What are the x and y coordinates for the center of gravity?
A) x > 6, y > 7
B) x > 6, y < 7
C) x < 6, y > 7
D) x < 6, y < 7
Table 13.3
Durham Toy, Inc. has five distribution centers at the location coordinates given as follows. The monthly
demand at each center is also given.
DC
Coordinates
Demand
A
(10, 12)
40
B
(25, 30)
25
C
(8, 15)
30
D
(11, 20)
10
E
(25, 6)
20
11) Use the information in Table 13.3. What are the x and y coordinates for the center of gravity?
A) x > 14, y > 15
B) x < 14, y > 15
C) x < 14, y < 15
D) x > 14, y < 15
12) Use the information in Table 13.3. If the plant is located at the center of gravity, what is the load-distance
score, assuming rectilinear distance?
A) less than or equal to 1,500
B) more than 1,500 but less than or equal to 1,600
C) more than 1,600 but less than or equal to 1,700
D) more than 1,700
13) Consider the location of four distribution centers, A, B, C, and D, with the following location coordinates
and shipping requirements per week.
Location
Coordinates
Tons
A
(0, 100)
2
B
(200, 300)
1
C
(500, 600)
3
D
(100, 200)
4
Management is considering locating a new plant at the site of one of the four distribution centers. What is the
load-distance score if the plant is located at distribution center A? (Use rectilinear distance.)
A) less than or equal to 4,500
B) greater than 4,500 but less than or equal to 5,000
C) greater than 5,000 but less than or equal to 5,500
D) greater than 5,500
14) Pinkerton Company has four distribution centers located at the location coordinates given. The monthly
demand at each center is also given.
DC
Coordinates
(Miles)
Demand
A
(100, 150)
50
B
(250, 250)
30
C
(150, 150)
15
D
(200, 300)
100
Assume that management is considering locating its new plant at distribution center A. What is the load-
distance score, assuming rectilinear distance?
A) less than 33,000
B) greater than 33,000 but less than 33,500
C) greater than 33,500 but less than 34,000
D) greater than 34,000
15) A single facility is needed to meet the demand of four regions depicted as follows:
Region Center
Coordinates
Demand
A
(2, 10)
20
B
(7, 10)
5
C
(2, 2)
10
D
(7, 4)
10
If the plant is located at A, what is the total load-distance score, assuming Euclidean (straight line) distance?
A) less than or equal to 100
B) more than 100 but less than or equal to 140
C) more than 140 but less than or equal to 180
D) more than 180
Table 13.4
Royal Flush Plumbing Supplies has the following demand forecasts for the five markets that it serves:
Market
Coordinates
Demand
Forecast
A
(3, 1)
10
B
(12, 9)
12
C
(9, 14)
9
D
(8, 8)
4
E
(2,10)
15
16) Use the information in Table 13.4. What is the center of gravity?
A) x < 7, y < 8
B) x > 7, y < 8
C) x < 7, y > 8
D) x > 7, y > 8
17) Use the information in Table 13.4. If Royal Flush decides to locate a warehouse at market D, what is the
total load-distance score? (Use rectilinear distance.)
A) less than 400
B) between 401 and 450
C) between 451 and 500
D) more than 500
Table 13.5
Paul’s Pretzels manufactures and distributes gourmet pretzels for limited retail sales. Paul has determined the
“demand points” and their relative locations as follows:
18) Use the information in Table 13.5. If Paul desires to locate a manufacturing facility at the center of gravity,
what would be the x and y coordinates of the facility?
A) x < 14, y < 14
B) x < 14, y > 14
C) x < 15, y < 14
D) x < 15, y > 15
19) Use the information in Table 13.5. If a facility were to be located at (15,15), what would be the load-
distance score? (Assume rectilinear distance.)
A) less than or equal to 5,000
B) more than 5,000 but less than or equal to 5,200
C) more than 5,200 but less than or equal to 5,400
D) more than 5,400
Table 13.6
Union Fork, Inc. has five distribution centers located at the location coordinates given as follows. The demand
at each center is also given.
DC
Coordinates
Demand
A
(2, 4)
10
B
(6, 2)
15
C
(4, 10)
25
D
(13, 4)
30
E
(10, 5)
20
20) Use the information in Table 13.6. What are the x and y coordinates for the center of gravity?
A) x > 7.5, y > 6
B) x > 7.5, y < 6
C) x < 7.5, y > 6
D) x < 7.5, y < 6
21) Use the information in Table 13.6. If a plant is located at a center of gravity, what is the load–distance
score, assuming rectilinear distance?
A) less than or equal to 500
B) more than 500 but less than or equal to 550
C) more than 550 but less than or equal to 600
D) more than 600
22) Use the information in Table 13.6. Assume that two plants, rather than one, are to be located. Plant 1
serves distribution centers A, B, and C. Plant 2 serves distribution centers D and E. What is the center of
gravity for plant 1?
A) x > 4, y > 7
B) x > 4, y < 7
C) x < 4, y > 7
D) x < 4, y < 7
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23) Use the information in Table 13.6. What is the total load–distance score for the two plants if Plant 1 is
located at the center of gravity serving distribution centers A, B, and C, and Plant 2 is located at the center of
gravity serving D and E? (Assume rectilinear distance.)
A) less than or equal to 300
B) more than 300 but less than or equal to 350
C) more than 350 but less than or equal to 400
D) more than 400
24) Use the information in Table 13.6. What is the total load–distance score for the two plants if Plant 1 is
located at the center of gravity serving A, B, and C, and Plant 2 is at the center of gravity serving D and E?
(Assume Euclidean, or straight line, distance.)
A) less than or equal to 240
B) more than 240 but less than or equal to 260
C) more than 260 but less than or equal to 280
D) more than 280
25) The Burdell Company has four distribution centers located at the location coordinates given as follows.
The monthly demand at each center is also given.
DC
Coordinates
Demand
A
(100, 150)
50
B
(250, 250)
30
C
(150, 150)
15
D
(200, 300)
100
Management wants to build a new plant that would be located at the center of gravity of the four distribution
centers. Which of the following options best represents the coordinates of the new plant location?
A) x coordinate is greater than 150 but less than 170; y coordinate is greater than 210 but less than 230.
B) x coordinate is greater than 150 but less than 170; y coordinate is greater than 230 but less than 250.
C) x coordinate is greater than 170 but less than 190; y coordinate is greater than 210 but less than 230.
D) x coordinate is greater than 170 but less than 190; y coordinate is greater than 230 but less than 250.
26) Kiddie Clothes wishes to locate its warehouse so that it would serve its four different stores, described as
15
follows. Based on the center of gravity, what are the x and y coordinates of the proposed warehouse location?
Store
x
y
Trips / Day
A
1
4
5
B
2
2
1
C
4
3
2
D
3
2
3
A) x is less than or equal to 3; y is less than or equal to 2.
B) x is less than or equal to 3; y is less than or equal to 2.5.
C) x is greater than or equal to 2.5; y is greater than or equal to 3.
D) x is less than or equal to 2.5; y is greater than or equal to 2.9.
27) Bill Burns, district manager of the Pizza Palace, wishes to locate a new store in the metropolitan areas.
Using the following information, what are the x and y coordinates for the center of gravity? Don’t round your
answer up or down before making your choice.
Market
Demand
(pizzas/day)
x coordinate
y coordinate
Grandview Heights
250
2
2
Upper Arlington
100
4
5
Bexley
150
7
3
Worthington
350
4
9
Medfield
500
4
3
A) x is less than or equal to 4; y is less or equal to than 4.5.
B) x is greater than or equal to 5; y is greater than or equal to 3.5.
C) x is less than or equal to 3.5; y is less than or equal to 4.5.
D) x is less than or equal to 4; y is greater than or equal to 4.5.
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28) A national drugstore chain prefers to operate one outlet in a town that has four major market segments.
The number of potential customers in each segment, along with the location coordinates, are given below.
Which would be the best location using the center of gravity method?
A) x > 10, y < 5
B) x < 10, y > 5
C) x < 9, y < 6
D) x < 11, y > 8
29) A grower and shipper of fresh gourmet herbs has determined the following demand forecast for the five
metropolitan markets that the firm serves. Based on your calculations of the center of gravity, where should
the new herb farm be located?
A) x > 6, y > 8
B) x < 5, y > 5
C) x < 7, y > 6
D) x < 6, y >6
Table 13.7
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Nuts-and-Bolts, Inc. wishes to find the best location for a plant that will satisfy customer demand in the
following five areas.
Location
x
coordinate
y
coordinate
Volume
A
3
1
35
B
5
0
90
C
8
7
15
D
2
3
20
E
5
4
55
30) Use the information in Table 13.7. What are the x and y coordinates for the center of gravity?
A) x > 9, y > 14
B) x < 4, y > 2
C) x > 4.5, y < 2
D) x < 9, y < 6
31) Use the information in Table 13.7. If the plant is located at the coordinates (5, 5), what is the total load–
distance score, assuming rectilinear distance?
A) less than or equal to 600
B) more than 600 but less than or equal to 700
C) more than 700 but less than or equal to 800
D) more than 800
32) Use the information in Table 13.7. If the plant is located at the coordinates (5, 5), what is the total load–
distance score, assuming Euclidean (straight line) distance?
A) less than or equal to 600
B) more than 600 but less than or equal to 700
C) more than 700 but less than or equal to 800
D) more than 800
Table 13.1
Four departments are located in adjacent bays in the same loading dock. The distance between adjacent bays
is 30 feet, the distance between bays separated by another (Alpha and Charlie, Bravo and Delta) is 60 feet, and
the distance between Alpha and Delta is 90 feet. Material flows (loads) between departments are shown in the
Table below.
To
To
To
To
From
Alpha
Bravo
Charlie
Delta
Alpha
0
15
20
30
Bravo
5
0
12
8
Charlie
10
7
0
4
Delta
15
24
6
0
33) Use the data in Table 13.1. What is the load distance score for locations Alpha, Bravo, Charlie and Delta?
Once your calculation is complete, how might the assignment of departments be improved?
Table 13.2
A single facility is needed to meet the demands of four markets. The locations and demands of these four
markets are shown below.
Market
Coordinates
Demand
A
(8, 6)
10
B
(4, 12)
15
C
(3, 2)
10
D
(9,6)
6
34) Using the data in Table 13.2, identify an optimal location for the new facility.
1) A decision maker using break-even analysis must assume that suppliers do not provide discounts for large
orders.
2) Break-even analysis can help a manager compare location alternatives on the basis of quantitative factors
that can be expressed in terms of total cost.
3) A quantitative method used to evaluate multiple locations based on total cost of production or service
operations is called:
A) break-even analysis.
B) the transportation method.
C) a preference matrix.
D) the load-distance method.
4) Which of the following statements about break-even analysis is incorrect?
A) No start-up costs exist.
B) Economies of scale cannot be achieved.
C) Variable costs vary as output changes.
D) Fixed costs vary as output changes.
Table 13.8
An operations manager has narrowed down the search for a new plant for Tim! to three locations. Fixed and
variable costs follow.
Location
Fixed Cost
Variable Cost
A
$100,000
$10
B
$150,000
$7
C
$200,000
$5
5) Use the information in Table 13.8 to determine the best statement.
A) Location C is the best one if volumes are quite high.
B) Location A becomes the most expensive place to produce at volumes in excess of 2,000.
C) The break-even quantity between A and B is less than or equal to 5,000 units.
D) The break-even quantity between C and B is more than 30,000 units.