OPERATIONS MANAGEMENT Chapter 8 – Location Strategies

1. OPERATIONS MANAGEMENTChapter 8 – Location Strategies Classroom discussion questions to accompany Heizer/Render Principles of Operations Management, 6e and Operations Management, 8e (to be used in conjunction with wireless polling devices or other classroom interaction activities) Jay Heizer Barry Render Chapter 8

2. Which best describes the costs influenced by the location decision? • Transportation costs. • Taxes. • Most fixed and variable costs. • Raw material costs. • Rents. Chapter 8

3. Which is usually not a reason to consider relocation? • Demand has outgrown current capacity. • Changes in labor productivity. • Product obsolescence. • Costs. • Local attitudes. Chapter 8

4. Location options include: • Expand an existing facility. • Maintain current sites and add another facility somewhere else. • Close existing facility and move to another location. • All of the above. Chapter 8

5. The first decision in selecting a location usually is: • Determine the country. • Determine the region. • Determine the site. Chapter 8

6. The second decision in selecting a location usually is: • Determine the country. • Determine the region. • Determine the site. Chapter 8

7. Which is generally not a consideration for selecting a country? • Political and economic risks. • Exchange rates and currency risks. • Site size and costs. • Location of markets. • Cultural issues. Chapter 8

8. Which is generally not a consideration for selecting a region? • Corporate desires. • Exchange rates and currency risks. • Costs and availability of utilities. • Government incentives. • Land and construction costs. Chapter 8

9. Which is generally not a consideration for selecting a site? • Labor availability, attitudes, costs. • Site size and cost. • Zoning restrictions. • Nearness to services/suppliers needed. • Environmental impact issues. Chapter 8

10. Which is the most important characteristic of a work force? • Training/education. • Work habits. • Cost. • All of the above. Chapter 8

11. “Clustering” refers to: • Locating close to markets. • Locating close to competitors. • Locating close to suppliers. Chapter 8

12. When the operations strategy has a focus on creativity and innovation, which has less influence on the location decision? • The presence of high quality scientific and technical talent. • An environment that encourages investment and intense local rivalry. • Pressure and insight gained from sophisticated local markets. • Local presence of related and supporting industries. • Overall labor costs. Chapter 8

13. A location method which instills objectivity into the process of hard to evaluate costs is: • Factor-rating method. • Locational break-even analysis. • Center-of-gravity method. • Transportation model. Chapter 8

14. A cost-volume analysis to make an economic comparison of location alternatives is: • Factor-rating method. • Locational break-even analysis. • Center-of-gravity method. • Transportation model. Chapter 8

15. A mathematical technique used for finding the best location for a single distribution point that services several customers is: • Factor-rating method. • Locational break-even analysis. • Center-of-gravity method. • Transportation model. Chapter 8

16. The selection of a location for a service facility should be based on: • Proximity to water. • Minimizing costs. • Proximity to transportation. • Maximizing revenues. Chapter 8

17. The selection of the location for a manufacturing facility should be based on: • Proximity to water. • Minimizing costs. • Proximity to transportation. • Maximizing revenues. Chapter 8