Test Bank Facility Location Chapter 9 12th Global Edition

TEST BANK

CHAPTER 9: FACILITY LOCATION

Multiple Choice Questions (correct answers are bolded)

1. The initial focus in facility location is on a ___________.

a. city

b. county

c. state or province

d. region

[LO: Beginning of the chapter material; Moderate; Application; AACSB Category 3: Analytical thinking]

2. Which of the following statements is false?

a. The initial focus in facility location is on a region.

b. Because manufacturing plants and warehousing can be very expensive to lease or build, companies are hesitant to close them.

c. Poorly located facilities do not impact logistical effectiveness.

d. Poorly located facilities negatively impact logistical efficiency.

[LO 9.1: To examine the strategic importance of facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

3. ___________ refers to companies that reconfigure their logistics networks to bring some production facilities closer to key consumer markets.

a. Nearsourcing

b. Outsourcing

c. Relocation

d. Locavore strategy

[LO 9.1: To examine the strategic importance of facility location; Easy; Concept; AACSB Category 3: Analytical thinking]

4. ___________ is the most popular location for nearsourcing among companies that do business in North America.

a. Canada

b. Mexico

c. Puerto Rico

d. Brazil

[LO 9.1: To examine the strategic importance of facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

5. In 2010, the three most populous U.S. states were located in the West, Southwest, and ___________.

a. Northeast

b. Southeast

c. Midwest

d. Southwest

[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

6. What two countries account for approximately one-third of the world’s population?

a. China and Indonesia

b. India and the United States

c. China and India

d. the United States and China

[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

7. A locavore strategy ___________.

a. is based on the agglomeration concept

b. refers to purchasing locally grown or produced foods

c. focuses on hiring local workers

d. is associated with reducing inventory turnover

[LO 9.1: To examine the strategic importance of facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

8. The text indicates that ___________ plans to open 500 new stores per year in China through 2020.

a. KFC

b. McDonald’s

c. Subway

d. Starbucks

[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

9. A pure material is one that___________.

a. loses no weight in manufacturing

b. cannot be mixed with other materials

c. is soluble in water

d. comes from the ocean

[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB Category 3: Analytical thinking]

10. The processing point for a pure material ___________.

a. should be closer to the source than to the market

b. should be closer to the market than to the source

c. can be anywhere in the world

d. can be anywhere near the source and the market

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

11. The processing point for a weight-losing raw material ___________.

a. can be anywhere near the source and the market

b. should be near its source

c. should be near the final market

d. should be equidistant between the source and the market

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

12. The processing point for a weight-gaining raw material ___________.

a. can be anywhere near the source and the market

b. should be near its source

c. should be near the final market

d. should be equidistant between the source and the market

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

13. Over the past quarter century, discussion of natural resources and facility location has increasingly factored in ___________ considerations.

a. cost

b. supply chain

c. diversity

d. environmental

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

14. Which of the following statements is false?

a. Pure materials lose no weight in processing.

b. With weight-gaining products, the processing point should be close to the market.

c. Water is a requirement for the location of many facilities.

d. With weight-losing products, the processing point should be close to the market.

[LO 9.3: To describe the major factors that influence facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

15. What country’s population is projected to grow from approximately 160 million in 2010 to nearly 260 million in 2033?

a. Indonesia

c. Russia

c. Nigeria

d. Ethiopia

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

16. Labor force ___________ is/are a key locational determinant as supply chains become more global in nature.

a. wage rates

b. size

c. skills

d. age

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

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.

a. Industry cluster

b. Locavore

c. Maquiladora

d. Free trade zone

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

18. Which of the following is not a key shortcoming of the sweatshops associated with the electronics industry?

a. violations of working hours

b. poor workplace ventilation

c. violations of wage agreements

d. discriminatory practices based on age

[LO 9.3: To describe the major factors that influence facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

19. Right-to-work laws refer to a situation where ___________.

a. worker strikes are illegal

b. every person who wants a job is guaranteed a job

c. each state provides employment to those people receiving public assistance

d. an individual cannot be compelled to join a union as a condition of employment

[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB Category 3: Analytical thinking]

20. Which of the following statements is false?

a. Countries with low labor costs often have a multitude of sweatshops.

b. There has been a decrease in maquiladoras in recent years.

c. A workforce’s union status may be a key locational determinant for some organizations.

d. Expatriate work assignments can be costly.

[LO 9.3: To describe the major factors that influence facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

21. An expatriate refers to a person who ___________.

a. is sent to work in other countries for extended periods of time

b. holds dual citizenship

c. has been stripped of citizenship

d. is ineligible to work outside his/her home country

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

22. Turnover rates for expatriate workers current run between ___________ and ___________ percent.

a. 10; 20

b. 15; 25

c. 20; 40

d. 25; 45

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

23. From a business perspective, ___________ taxes are analogous to the personal property taxes paid by individuals.

a. sales

b. real estate

c. inventory

d. corporate franchising

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

24. The state of Massachusetts provided ___________ with approximately $145 million in incentives to move its corporate headquarters to Boston.

a. Procter & Gamble

b. General Electric

c. Boeing

d. McDonald’s

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

25. Which of the following statements is false?

a. The accessibility of highway transportation often ranks as one of the most important criteria in facility location.

b. Transportation considerations are a key aspect of facility location decisions.

c. A poor facility location can increase transportation costs as well as negatively impact customer service.

d. Intermodal competition refers to the number of carriers within a particular mode of transportation.

[LO 9.3: To describe the major factors that influence facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

26. The existence of transportation competition, whether intermodal or intramodal, tends to have ___________.

a. both cost and service benefits to a user

b. cost, but not service, benefits to a user

c. service, but not cost, benefits to a user

d. neither cost nor service benefits to a user

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

27. ___________ refers to the net advantages that can be gained by a sharing of common locations by various enterprises.

a. Supplier development

b. Coopetition

c. Supplier relationship management

d. Agglomeration

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

28. The agglomeration concept is better known today as the ___________ concept.

a. nearsourcing

b. coopetition

c. industry cluster

d. supply chain management

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

29. Supplier parks are a concept that developed around ___________ and their suppliers in Europe.

a. appliance makers

b. apparel makers

c. computer makers

d. automakers

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

30. With respect to commodity flows, logisticians are especially interested in ___________ and ___________.

a. what is being produced; where it is being shipped

b. how much is being produced; where it is being produced

c. how much is being produced; where it is being shipped

d. what is being produced; where it is being produced

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

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.

a. Poland

b. Hungary

c. Switzerland

d. Austria

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

32. One branding expert has argued that in the twenty-first century ___________ represents the leading reason why businesses locate in a particular area.

a. transportation considerations

b. quality-of-life considerations

c. labor considerations

d. natural resource consideration

[LO 9.3: To describe the major factors that influence facility location; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

33. ___________ has identified bureaucratic red tape as causing business to be diverted to Asian ports characterized by less bureaucratic red tape.

a. Thailand

b. China

c. Indonesia

d. Malaysia

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

34. A brownfield is ___________.

a. a term for where crushed boxes are stored before recycling

b. a term that refers to a potential site that has no trees needing to be cleared before construction

c. a property for which use and redevelopment is complicated by past use

d. a property that has been excavated but not further developed

[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Concept; AACSB Category 3: Analytical thinking]

35. Which of the following is not a site-specific (specialized) factor in facility location?

a. environment

b. zoning restrictions

c. weather

d. natural resources

[LO 9.4: To examine a site’s specialized location characteristics; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

36. A free trade zone refers to an area ___________.

a. that is home to businesses that are owned and operated by large concentrations of a particular ethnic group

b. in which products can be stored, exhibited, or processed without being subjected to duties and quotas unless they enter the customs territory of the zone country

c. in which the federal government disregards all import and export quotas for products coming from, or destined to, “favored” nations

d. outside the legal jurisdiction of federal, state, and/or local governments

[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Concept; AACSB Category 3: Analytical thinking]

37. The center-of-gravity approach to location analysis minimizes ___________.

a. labor costs

b. warehousing costs

c. real estate taxes

d. distance to existing facilities

[LO 9.5: To explain location decisions using simple grid systems; Moderate; Application; AACSB Category 3: Analytical thinking]

38. How does the weighted center-of-gravity approach to location analysis differ from the center-of-gravity approach to location analysis?

a. The weighted approach considers real estate taxes.

b. The weighted approach is less complicated.

c. The weighted approach considers shipment volume.

d. The weighted approach considers tapering rates.

[LO 9.5: To explain location decisions using simple grid systems; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

39. The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers give ___________ days’ notice about plant closings and mass layoffs.

a. 30

b. 60

c. 90

d. 120

[LO 9.6: To learn about facility relocation and facility closing; Moderate; Application; AACSB Category 3: Analytical thinking]

40. Which of the following is not a possible reason for a facility closing?

a. eliminating redundant capacity in mergers and acquisitions

b. poor planning

c. insufficient volume of business

d. limited competition

[LO 9.6: To learn about facility relocation and facility closing; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

True-False Questions

1. The initial focus in facility location is on a county.

[LO: Beginning of the chapter material; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Facility location is a logistics/supply chain activity that has evolved from a tactical decision to one of tremendous strategic importance in numerous organizations.

[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 logistical effectiveness, but have little impact on logistical efficiency.

[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Agglomeration refers to companies reconfiguring their logistics networks to bring some production facilities closer to key consumer markets.

[LO 9.1: To examine the strategic importance of facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. China and India account for approximately one-third of the world’s population.

[LO 9.1: To examine the strategic importance of facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. A locavore strategy focuses on hiring local workers.

[LO 9.1: To examine the strategic importance of facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Retailers might add a distribution center when some of its stores can no longer consistently be supplied within two days by existing facilities.

[LO 9.2: To explain the general process of determining the optimum number of facilities; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. A pure material is one that is totally water soluble.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. The processing point for a weight-losing raw material can be anywhere between the source and the market.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

1. The processing point for a weight-gaining raw material should be close to the market.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Over the past quarter century, discussion of natural resources and facility location has increasingly factored in environmental and sustainability considerations.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Population can be viewed as both a market for goods and a potential source of labor.

[LO 9.3: To describe the major factors that influence facility location; Easy; Application; AACSB Category 3: Analytical thinking]

1. Population size is an irrelevant consideration in the facility location decision.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]]

1. Labor wage rates appear to be a key locational determinant as supply chains become more global in nature.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Maquiladora plants have experienced a resurgence in recent years because of a focus on manufactured products that depend on fast time to market.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Sweatshops are organizations that exploit workers and that do not comply with fiscal and legal obligations toward employees.

[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB Category 3: Analytical thinking]

1. Right-to-work laws mean that every person who wants a job is guaranteed a job.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. An expatriate is a person who is not allowed to work outside his/her home country.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Inventory taxes have become increasingly difficult to collect in part because of a lack of agreement as to what is meant by inventory.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. A general rule of thumb is that the services received from business taxes represent only about 50 percent of the taxes that were paid.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Massachusetts provided General Electric with approximately $145 million in incentives to move its corporate headquarters to Boston.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Intermodal competition refers to the number of carriers within a particular mode of transportation.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. A poor facility location can increase transportation costs, but has minimal impact on customer service.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Centralized facilities tend to minimize total transit distances, which likely results in minimum transportation costs.

[LO 9.3: To describe the major factors that influence facility location; Easy; Application; AACSB Category 3: Analytical thinking]

1. Agglomeration refers to the net advantages that can be gained by a sharing of common locations by various enterprises.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. 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]

1. Supplier parks refer to places where main component makers locate in specially created industrial complexes adjacent to assembly plants.

[LO 9.3: To describe the major factors that influence facility location; Easy; Concept; AACSB Category 3: Analytical thinking]

1. With respect to commodity flows, logisticians are especially interested in what is being produced and where it is being produced.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. The development and implementation of multicountry trade agreements has had profound impacts on trade patterns.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. 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 location.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Quality of life considerations play a limited role in facility location decisions.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Government considerations such as the relevant legal system, political stability, and protectionism are important when companies are thinking of facility location in non-domestic countries.

[LO 9.3: To describe the major factors that influence facility location; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. A community can encourage or discourage business activity through changes in the zoning classifications of land.

[LO 9.4 To examine a site’s specialized location characteristics; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Brownfields refer to a place where flattened cartons are stored until they are recycled.

[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Free trade zones must be adjacent to a port or an airport.

[LO 9.4: To examine a site’s specialized location characteristics; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Grid systems are important to locational analysis because they allow one to analyze spatial relationships with relatively simple mathematical tools.

[LO 9.5: To explain location decisions using simple grid systems; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. The idea behind a weighted center-of-gravity approach is that a prospective warehousing facility will be located closer to the existing sites with the greatest current demand.

[LO 9.5: To explain location decisions using simple grid systems; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Facility relocation is associated with business growth, while facility closing is associated with business contraction.

[LO 9.6: To learn about facility relocation and facility closing; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. The Worker Adjustment and Retraining Notification (WARN) Act mandates that employers give 90 days’ notice about plant closings and mass layoffs.

[LO 9.6: To learn about facility relocation and facility closing; Moderate; Application; AACSB Category 3: Analytical thinking]

1. The human impact of facility closing should be a relatively low priority.

[LO 9.6: To learn about facility relocation and facility closing; Easy; Application; AACSB Category 3: Analytical thinking]