1. Which of the following statements is true regarding location decision criteri
ID: 460090 • Letter: 1
Question
1. Which of the following statements is true regarding location decision criteria?
A) For most manufacturing and service businesses, the capabilities, talent and expertise of the workforce is important when making location decisions.
B) Since labor costs vary from one location to another, labor costs cannot be used as decision criteria.
C) Quality of life issues are usually not considered in the relocation decision.
D) The low-cost location almost always ends up to be the location choice.
2. A popular means of measuring the impact of time on business productivity is referred to as:
A) Lead time
B) Queue time
C) Cash-to-cash cycle
D) Due date performance
E) None of the above
3. Which of the components of time series cannot, by definition, be forecast?
A) Cycle
B) Trend
C) Seasonality
D) Random fluctuation
E) None of the above
4. The strengths of a warehousing strategy are:
A) Risk pooling add reduced inbound transportation costs
B) Accurate forecasts and reduced bullwhip effect
C) Reduced inventory carrying costs and reduced transportation costs
D) Enhanced response time and lower levels of inventory
Explanation / Answer
1-A Although location decisions depend on nearness to market, availability of raw material but one major common factor between manufacturing and service business is that of availability of skilled manpower to execute manufacturing or provide services.
2-C Cash to cahs cycle is popular because it measures the productivity based on time required between cash outlay for raw material purchase or inventory cosumed during production or service offered and the actual reciept of cash when the product is sold.
3-D Random fluctuations can not be forecast since it accounts for irregular variability in time series and it's almost impossible to derive a pattern out of it making the forecasting not possible.
4-A Warehousing helps in risk pooling and controlling inbound transportation cost
The decisions on whether to have many warehouses close to the customers or more centralized locations should consider the risk pooling effects. By centralizing a product in one location, you can take advantage of the aggregated demand. On the other hand, you need to consider proximity to customers and other factors that may push towards maintaining more warehouses.
The more consolidated the products and the warehouses are, the cheaper the transportation costs as shipments can be sent in larger batches. Therefore considering the transportation impact on these decisions is important.
hence for warehousing strategy riskpooling and inbound transportation is the biggest strength
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