MANAGEMENT CLASS QUIZ

Question 1
1 / 1 pts
A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs 0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If demand is expected to be 10 million units, which plant offers the lowest total cost?
Plant A, because it is cheaper than Plant B for all volumes under 8,000,000 units
Correct!
Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units
Plant A, because it is cheaper than Plant B for all volumes
Plant B, because it has the lower variable cost per unit
neither Plant A nor Plant B, because the crossover point is at 10 million units

Question 2
1 / 1 pts
Industrial location analysis typically attempts to
Correct!
reduce costs
maximize sales
focus more on human resources
be environmentally friendly
none of the above

Question 3
1 / 1 pts
Which of the following is a location analysis technique typically employed by a manufacturing organization?
Correct!
transportation method
queuing theory
correlation analysis and traffic counts
simulation
demographic analysis

Question 4
0 / 1 pts
On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which
fixed costs are equal for two alternative locations
variable costs are equal for two alternative locations
You Answered
total costs are equal for all alternative locations
fixed costs equal variable costs for one location
Correct Answer
total costs are equal for two alternative locations

Question 5
1 / 1 pts
A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a location decision.
transportation costs
cost of raw materials
Correct!
parking and access
climate
taxes

Question 6
1 / 1 pts
An approach to location analysis that includes both qualitative and quantitative considerations is
locational cost-volume
Correct!
factor rating
transportation model
assignment method
make or buy analysis

Question 7
1 / 1 pts
A location decision for an appliance manufacturer would tend to have a(n)
Correct!
cost focus
labor focus
revenue focus
environmental focus
education focus

Question 8
1 / 1 pts
A regional bookstore chain is about to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis?
assembly line balancing
load-distance analysis
Correct!
center-of-gravity model
linear programming
all of the above

Question 9
1 / 1 pts
Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries?
willing to accept low wages
have a high level of education
speak English
possess an in-depth knowledge of American popular culture
Correct!
are young

Question 10
1 / 1 pts
Intangible costs include which of the following?
quality of prospective employees
quality of education
availability of public transportation
Correct!
all of the above
none of the above

Question 11
1 / 1 pts
A location decision for a traditional department store (Macy’s) would tend to have a(n)
cost focus
labor focus
Correct!
revenue focus
environmental focus
education focus

Question 12
1 / 1 pts
Evaluating location alternatives by comparing their composite (weighted-average) scores involves
Correct!
factor rating analysis
cost-volume analysis
transportation model analysis
linear regression analysis
crossover analysis

Question 13
1 / 1 pts
Traffic counts and purchasing power analysis of drawing area are techniques associated with
an industrial location decision
a manufacturing location decision
Correct!
a retail or professional service location decision
the factor rating method
the transportation method

Question 14
1 / 1 pts
Operations managers will need to consider ethical and social responsibility issues when location decisions involve
child labor issues
sweatshop conditions
allegiance to the firm’s current location
corruption
Correct!
all of the above

Question 15
0 / 1 pts
The transportation method, when applied to location analysis
minimizes total fixed costs
Correct Answer
minimizes total production and transportation costs
You Answered
minimizes total transportation costs
maximizes revenues
minimizes the movement of goods

Question 16
1 / 1 pts
Which of the following methods best considers intangible costs related to a location decision?
crossover methods
locational break-even analysis
Correct!
factor rating analysis
the transportation method
the assignment method

Question 17
1 / 1 pts
The center-of-gravity method does not take into consideration the
location of markets
volume of goods shipped to the markets
Correct!
value of the goods shipped
combination of volume and distance
center-of-gravity method considers none of the above

Question 18
1 / 1 pts
Which of the following is among the eight components of revenue and volume for a service firm?
uniqueness of the firm’s and the competitor’s locations
quality of the competition
quality of management
purchasing power of the customer-drawing area
Correct!
all of the above

Question 19
1 / 1 pts
A manufacturing firm finds a location that has a significant cost advantage over alternatives, but rejects that location because the educational infrastructure was insufficient to train the firm’s workers in its special production technologies. The firm’s action illustrates the link between __________ and location.
Correct!
innovation
clustering
tax incentives
globalization
proximity

Question 20
1 / 1 pts
Which of the following statements regarding FedEx is true?
Its hub in Memphis, Tennessee, was selected because of its low cost.
Memphis, Tennessee, is the only hub in the company’s global flight network.
Correct!
FedEx believes the hub system helps reduce mishandling and delays due to better controls.
FedEx uses a hub system in the U.S., but a city-to-city network in other countries.
Memphis is FedEx’s only hub airport in the United States.

Question 21
1 / 1 pts
FedEx chose Memphis, Tennessee, as its U.S. hub because
the city is in the center of the U.S., geographically
the airport has relatively few hours of bad weather closures
it needed a means to reach cities to which it did not have direct flights
the firm believed that a hub system was superior to traditional city-to-city flight scheduling
Correct!
All of the above are true.

Question 22
1 / 1 pts
LaQuinta Motor Inns has a competitive edge over its rivals because it
Correct!
uses regression analysis to determine which variables most influence profitability
picks better locations than its rivals
picks larger locations than its rivals
builds only along interstate highways
all of the above

Question 23
1 / 1 pts
When innovation replaces cost as a firm’s focus for location decisions, the presence of other state-of-the-art firms is a plus, not a negative, for the firm’s competitiveness.
Correct!
True
False

Question 24
1 / 1 pts
An example of an intangible cost, as it relates to location decisions, is the quality of education.
Correct!
True
False

Factors that affect location decisions, moderate

Question 25
1 / 1 pts
The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.
Correct!
True
False

Question 26
1 / 1 pts
The transportation model calculates an optimal shipping system between a central facility and several outlying customers.
True
Correct!
False

Question 27
1 / 1 pts
Lists have been developed that rank countries on issues such as “competitiveness” and “corruption.”
Correct!
True
False

Question 28
1 / 1 pts
Manufacturers may want to locate close to their customers, if the transportation of finished goods is expensive or difficult.
Correct!
True
False

Question 29
1 / 1 pts
FedEx chose Memphis, Tennessee, for its central location, or “hub,” primarily because of the incentives offered by the city of Memphis and the state of Tennessee.
True
Correct!
False

Question 30
1 / 1 pts
Hard Rock Café is now looking at possible new locations primarily in the U.S.
True
Correct!
False

Question 31
0 / 1 pts
Hard Rock Café considers various aspects of a country including political risk, currency risk and personal safety of the employees.
You Answered
True
Correct Answer
False

Question 32
1 / 1 pts
Hard Rock Café’s main consideration when choosing a site is transportation.
True
Correct!
False

Question 33
1 / 1 pts
Last year Hard Rock Café signed a deal to open a new restaurant in Prague.
True
Correct!
False

Question 34
1 / 1 pts
Last year Hard Rock Café signed a deal to open three new company-owned restaurants.
True
Correct!
False

Question 35
1 / 1 pts
Hard Rock Café is working on a deal in another European location in Western Europe.
Correct!
True
False

Question 36
1 / 1 pts
Hard Rock Café typically signs leases for ten or more years.
Correct!
True
False

Question 37
1 / 1 pts
In the last years there has been resurgence in city centers in Latin America and Europe.
True
Correct!
False

Question 38
1 / 1 pts
Hard Rock Café carries out break even analysis for a selected location.
Correct!
True
False

Question 39
1 / 1 pts
Hard Rock Café carries out analysis for a selected location utilizing fixed and variable cost estimates.
Correct!
True
False