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1
TEST BANK
CHAPTER 9: FACILITY LOCATION
Multiple Choice Questions (correct answers are bolded)
1. The initial focus in facility location is on a ___________.
2. Which of the following statements is false?
3. ___________ refers to companies that reconfigure their logistics networks to bring some
production facilities closer to key consumer markets.
4. ___________ is the most popular location for nearsourcing among companies that do business
in North America.
2
5. In 2010, the three most populous U.S. states were located in the West, Southwest, and
___________.
6. What two countries account for approximately one-third of the world’s population?
7. A locavore strategy ___________.
8. The text indicates that ___________ plans to open 500 new stores per year in China through
2020.
9. A pure material is one that___________.
10. The processing point for a pure material ___________.
11. The processing point for a weight-losing raw material ___________.
12. The processing point for a weight-gaining raw material ___________.
13. Over the past quarter century, discussion of natural resources and facility location has
increasingly factored in ___________ considerations.
14. Which of the following statements is false?
15. What country’s population is projected to grow from approximately 160 million in 2010 to
nearly 260 million in 2033?
16. Labor force ___________ is/are a key locational determinant as supply chains become more
global in nature.
17. ___________ plants, which are located just south of the U.S.–Mexican border, provide much
needed jobs to Mexican workers and allow for low-cost, duty-free production so long as all
goods are exported from Mexico.
18. Which of the following is not a key shortcoming of the sweatshops associated with the
electronics industry?
19. Right-to-work laws refer to a situation where ___________.
20. Which of the following statements is false?
21. An expatriate refers to a person who ___________.
6
22. Turnover rates for expatriate workers current run between ___________ and ___________
percent.
23. From a business perspective, ___________ taxes are analogous to the personal property taxes
paid by individuals.
24. The state of Massachusetts provided ___________ with approximately $145 million in
incentives to move its corporate headquarters to Boston.
25. Which of the following statements is false?
7
26. The existence of transportation competition, whether intermodal or intramodal, tends to have
___________.
27. ___________ refers to the net advantages that can be gained by a sharing of common
locations by various enterprises.
28. The agglomeration concept is better known today as the ___________ concept.
29. Supplier parks are a concept that developed around ___________ and their suppliers in
Europe.
30. With respect to commodity flows, logisticians are especially interested in ___________ and
___________.
31. The European Union’s expansion into Central and Eastern European countries has resulted in
the Czech Republic and ___________ becoming favored distribution sites because of their
relatively central location.
32. One branding expert has argued that in the twenty-first century ___________ represents the
leading reason why businesses locate in a particular area.
33. ___________ has identified bureaucratic red tape as causing business to be diverted to Asian
ports characterized by less bureaucratic red tape.
34. A brownfield is ___________.
35. Which of the following is not a site-specific (specialized) factor in facility location?
36. A free trade zone refers to an area ___________.
37. The center-of-gravity approach to location analysis minimizes ___________.
38. How does the weighted center-of-gravity approach to location analysis differ from the center-
of-gravity approach to location analysis?
39. The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers
give ___________ days’ notice about plant closings and mass layoffs.
40. Which of the following is not a possible reason for a facility closing?
11
True-False Questions
[LO: Beginning of the chapter material; Moderate; Application; AACSB Category 3: Analytical
thinking]
2. Facility location is a logistics/supply chain activity that has evolved from a tactical decision
[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
3. Poorly located facilities, such as manufacturing plants and warehouses, negatively impact
[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
4. Agglomeration refers to companies reconfiguring their logistics networks to bring some
[LO 9.1: To examine the strategic importance of facility location; Moderate; Concept; AACSB
Category 3: Analytical thinking]
[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
[LO 9.1: To examine the strategic importance of facility location; Moderate; Concept; AACSB
Category 3: Analytical thinking]
7. Retailers might add a distribution center when some of its stores can no longer consistently
[LO 9.2: To explain the general process of determining the optimum number of facilities;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
9. The processing point for a weight-losing raw material can be anywhere between the source
[LO 9.3: To describe the major factors that influence facility location; Moderate; Application;
AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Application;
AACSB Category 3: Analytical thinking]
11. Over the past quarter century, discussion of natural resources and facility location has
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Easy; Application;
AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]]
14. Labor wage rates appear to be a key locational determinant as supply chains become more
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
15. Maquiladora plants have experienced a resurgence in recent years because of a focus on
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
16. Sweatshops are organizations that exploit workers and that do not comply with fiscal and
[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB
Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
19. Inventory taxes have become increasingly difficult to collect in part because of a lack of
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
20. A general rule of thumb is that the services received from business taxes represent only about
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
21. Massachusetts provided General Electric with approximately $145 million in incentives to
[LO 9.3: To describe the major factors that influence facility location; Moderate; Application;
AACSB Category 3: Analytical thinking]
22. Intermodal competition refers to the number of carriers within a particular mode of
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
23. A poor facility location can increase transportation costs, but has minimal impact on
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
24. Centralized facilities tend to minimize total transit distances, which likely results in
[LO 9.3: To describe the major factors that influence facility location; Easy; Application;
AACSB Category 3: Analytical thinking]
25. Agglomeration refers to the net advantages that can be gained by a sharing of common
14
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
26. The agglomeration concept is better known today as the supply chain management concept.
[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept;
AACSB Category 3: Analytical thinking]
27. Supplier parks refer to places where main component makers locate in specially created
[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB
Category 3: Analytical thinking]
28. With respect to commodity flows, logisticians are especially interested in what is being
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
29. The development and implementation of multicountry trade agreements has had profound
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
30. The European Union’s expansion into Central and Eastern European countries has seen
Hungary become a favored distribution site because of its relatively central geographic
[LO 9.3: To describe the major factors that influence facility location; Moderate; Application;
AACSB Category 3: Analytical thinking]
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
32. Government considerations such as the relevant legal system, political stability, and
protectionism are important when companies are thinking of facility location in non-domestic
[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
15
33. A community can encourage or discourage business activity through changes in the zoning
[LO 9.4 To examine a site’s specialized location characteristics; Moderate; Application; AACSB
Category 3: Analytical thinking]
[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Concept; AACSB
Category 3: Analytical thinking]
[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Application;
AACSB Category 3: Analytical thinking]
36. Grid systems are important to locational analysis because they allow one to analyze spatial
[LO 9.5: To explain location decisions using simple grid systems; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
37. The idea behind a weighted center-of-gravity approach is that a prospective warehousing
[LO 9.5: To explain location decisions using simple grid systems; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
38. Facility relocation is associated with business growth, while facility closing is associated
[LO 9.6: To learn about facility relocation and facility closing; Moderate; Concept; AACSB
Category 3: Analytical thinking]
39. The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers
[LO 9.6: To learn about facility relocation and facility closing; Moderate; Application; AACSB
Category 3: Analytical thinking]
[LO 9.6: To learn about facility relocation and facility closing; Easy; Application; AACSB
Category 3: Analytical thinking]
