The macro approach that locates a warehouse or distribution center at a point that minimizes transportation costs for products moving between a manufacturing plant and the markets, and is relatively simplistic: | 1. | Hoover's model | | 2. | center of gravity approach* | | 3. | none of these are macro location approaches | | 4. | Weber's model | | 5. | Von Thunen's model |
Which is true regarding the facility/supply chain network design decision? | a. | generally, qualitative criteria are considered first | | b. | it should be coordinated closely with the corporate and overall business strategies that may be in place * | | c. | global locations should not be considered | | d. | the facility’s impact on other functional areas should be considered, but it is not as important |
For most firms, the MOST important measure of customer service is: | 1. | the ability to backorder* | | 2. | profitability of the particular channel of distribution | | 3. | the number of decentralized transactions within a business cycle | | 4. | inventory availability within a specified order cycle time | | 5. | the length of the order cycle |
Which is an advantage of the grid technique for facility location? | a. | it considers topographic conditions in choosing the optimum location | | b. | it is a dynamic approach with solutions remaining optimum over many time periods | | c. | computationally, it is relatively easy to use* | | d. | it establishes the final determination of the best site |
What advantage does the transit privilege give to shippers located at intermediate locations? | a. | the right to change consignees during shipment | | b. | a lower, long-distance through rate charged for the shipment* | | c. | allows importers to enter a product and hold it without paying duties | | d. | avoidance of terminal charges for each intermediate stop |
Which is correct regarding the transit privilege? | a. | it is normally available for any location and commodity | | b. | it permits the shipper to stop the shipment in transit and physically change the product’s characteristic* | | c. | it magnifies those geographic disadvantages that companies associate with a producer’s location | | d. | it results in only an end point, either an origin or destination, being the optimum location |
The grid technique is used to determine a fixed facility location that represents the least-cost center for moving incoming materials and outbound product within a geographic grid. This least cost center is also referred to as | a. | a center of gravity* | | b. | a breakeven point | | c. | source point | | d. | a zero point |
When a blanket rate structure is used, which factor is eliminated as a locational determinant? | a. | raw material sources | | b. | transportation rate* | | c. | labor rate | | d. | market sources |
The classic objective of a network design model has been | a. | to examine the finished goods flow from the warehouse to the customer. | | b. | to establish the number, location, and size of finished goods distribution centers and associated product flows*. | | c. | to measure and control site locations. | | d. | to find the best location for a forward facing warehouse. |
As the number of warehouses DECREASE: | 1. | Transport costs will increase; inventory costs and costs of lost sales will decrease | | 2. | Transport costs and inventory costs will increase; cost of lost sales will decrease* | | 3. | Transport costs and cost of lost sales will decrease; inventory costs will increase | | 4. | Transport costs and cost of lost sales will increase; inventory costs will decrease | | 5. | Transport cost, inventory costs, and cost of lost sales will all increase |
Which is true regarding optimization models? | a. | Optimization models are able to accommodate broad problem definitions, rather than provide an optimum solution. | | b. | Optimization models are based on precise mathematical procedures that are guaranteed to find the “best” solution for the problem under evaluation*. | | c. | Optimization models will guarantee increased profits. | | d. | The Grid Technique is a powerful optimization model. | The grid technique | a. | assumes that the raw materials sources and finished goods markets are variable. | | b. | assumes that the raw materials sources and finished goods markets are fixed* | | c. | assumes non-linear transportation rates | | d. | is a variation of SAILS |
What is the effect of tapering rates on facility location? | a. | makes the optimum location at the midpoint between raw material sources and the marketplace | | b. | pulls the facility toward the location* | | c. | pulls the location toward the source or the market | | d. | pushes the raw materials sources toward the location |
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid HORIZONTAL coordinate of: X Coordinate Y Coordinate Tons
Sources A 9 7 600
Sources B 7 3 400
Market X 1 7 200
Market Y 9 1 400
Market Z 5 1 300

| 1. | 4.08 | | 2. | 2.71 | | 3. | 7.11* | | 4. | 3.83 | | 5. | 6.20 | | 6. | 3.95 |
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid VERTICAL coordinate of: X Coordinate Y Coordinate Tons
Sources A 9 7 600
Sources B 7 3 400
Market X 1 7 200
Market Y 9 1 400
Market Z 5 1 300 | 1. | 4.08 | | 2. | 3.83 | | 3. | 3.95 | | 4. | 7.11* | * | 5. | 2.71 | | 6. | 6.20 |