Q&A Hero

Q: 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. an airport that lacks paved runways e. none of the above

Q: Which of following is not a possible quality of life consideration in facility location? a. cost of living b. crime rate c. educational opportunities d. the weather e. all of the above are quality of life considerations

Q: 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

Q: 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

Q: Supplier parks are a concept that developed around ____ and their suppliers in Europe. a. supermarkets b. apparel makers c. computer makers d. automakers

Q: ____ 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

Q: The existence of transportation competition, whether intermodal or intramodal, tends to ____. a. have both cost and service benefits to a user b. have cost, but not service, benefits to a user c. have both cost and service benefits to a user d. have neither cost nor service benefits to a user

Q: 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. a centralized facility location can maximize a facility's service area e. all of the above are true

Q: A general rule of thumb is that the services received represent only about ____ percent of the taxes paid. a. 60 b. 50 c. 40 d. 30

Q: 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

Q: Turnover rates for expatriate workers current run between ____ percent. a. 10 and 20 b. 15 and 25 c. 20 and 40 d. 25 and 45

Q: 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

Q: All of the following are true except ____. 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 e. all of the above are true

Q: 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

Q: 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 e. all of the above are key shortcomings

Q: ____ 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

Q: Labor force ____ are a key locational determinant as supply chains become more global in nature. a. wage rates b. size c. skills d. age

Q: Which of the following 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. a 250,000 square foot distribution center might require at least 50 acres of land for construction purposes e. all of the above are true

Q: 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

Q: 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

Q: 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

Q: The processing point for a pure material ____. a. should be near its source b. should be near the final market c. can be anywhere in the world d. can be anywhere near the source and the market

Q: A pure material ____. a. is one that loses no weight in manufacturing b. cannot be mixed with other materials c. is soluble in water d. comes from the ocean e. none of the above

Q: The general trend in recent years has been for companies to do what with their distribution networks? a. maintain the status quo b. relocate their facilities c. slightly increase the number of facilities d. reduce the number of facilities

Q: 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 e. none of the above

Q: 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

Q: In 2010, the three most populous U.S. states were located in the West, Southwest, and ____. a. Northeast b. Southeast c. Midwest d. Southwest

Q: ____ is the most popular location for near-sourcing among companies that do business in North America. a. Canada b. Mexico c. Puerto Rico d. Brazil e. none of the above

Q: 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 e. all of the above are true

Q: The initial focus in facility location is on a ____. a. city b. county c. state or province d. region

Q: Distinguish between facility relocation and facility closing. How should companies deal with their human resources (workers) in both situations?

Q: Discuss advantages and disadvantages to grid systems such as the center-of-gravity and weighted center-of-gravity approaches.

Q: What is a free trade zone? What functions might be performed in it?

Q: Briefly describe specialized, or site-specific, considerations that should be taken into account in the facility location decision.

Q: Beyond the general factors discussed in this chapter, what additional considerations are important when a firm is thinking of locating a facility (facilities) in other countries?

Q: Explain why quality-of-life issues should be considered in the facility location decision.

Q: Discuss how multicountry trade agreements have influenced the location of production or distribution facilities.

Q: What are industry clusters, and what are some of their potential advantages?

Q: How do transportation considerations influence facility location decisions?

Q: Why have inventory taxes become increasingly difficult to collect?

Q: What are expatriate workers? What challenges do they face?

Q: What are right-to-work laws? How do they influence locational decisions?

Q: Discuss the advantages and disadvantages of locating manufacturing, assembly, or distribution facilities in countries with relatively low wages.

Q: What are maquiladoras? Why has there been a resurgence in maquiladoras in recent years?

Q: Discuss how population can be viewed as both a market for goods and a source of labor.

Q: How does a raw material's status as pure, weight-losing, or weight-gaining influence the facility location decision?

Q: Discuss the factors that influence the number of facilities that a firm chooses to operate.

Q: In what way is the location of customer markets a strategic consideration in facility location?

Q: How have cost considerations influenced facility location decisions?

Q: Explain how the location decision process involves several layers of screening or focus.

Q: Taking into account all the factors listed in Questions 1, 2, 3, and 5, calculate Low's EOQ for kegs of nails.

Q: Temporarily, ignore your work on Questions 2, 3, and 4. Low's luck at the race track is over; he now must borrow money to finance his inventory of nails. Looking at the situation outlined in Question 1, assume that the wholesale cost of nails is $40 per keg and that Low must pay interest at the rate of 1.5% per month on the unsold inventory. What is his new EOQ?

Q: Take into account the answer to Question 1 and the supplier's new policy outlined in Question 2 and the warehouse's new policy in Question 3. Then determine Low's new EOQ.

Q: Temporarily, ignore your work on Question 2. Assume that Low's warehouse offers to rent Low space on the basis of the average number of kegs Low will have in stock, rather than on the maximum number of kegs Low would need room for whenever a new shipment arrived. The storage cost per keg remains the same. Does this change the answer to Question 1? If so, what is the new answer?

Q: Assume all conditions in Question 1 hold, except that Low's supplier now offers a quantity discount in the form of absorbing all or part of Low's order processing costs. For orders of 750 or more kegs of nails, the supplier will absorb all the order processing costs; for orders between 249 and 749 kegs, the supplier will absorb half. What is Low's new EOQ? (It might be useful to lay out all costs in tabular form for this and later questions.)

Q: Using the EOQ methods outlined in the chapter, how many kegs of nails should Low order at one time?

Q: Vendor-managed inventory can only be applied to consumer, and not industrial, products.

Q: In vendor-managed inventory, the size and timing of replenishment orders are the responsibility of the manufacturer.

Q: One logistical challenge with service parts logistics is that it can be extremely difficult to forecast the demand for the necessary parts.

Q: Service parts logistics has decreased in importance in recent years.

Q: A confluence of events, such as increasing global sourcing, suggests that organizations should carefully consider the potential trade-offs before adopting a lean inventory philosophy.

Q: Efficient consumer response (ECR) and collaborative planning, forecasting, and replenishment (CPFR) are examples of lean inventory approaches.

Q: Because of smaller, more frequent orders and closer supplier location, trucking tends to be an important mode of transportation in the just-in-time approach.

Q: Lean manufacturing focuses on the elimination of waste.

Q: Many grocery chains target in-stock rates of 90 percent for individual stores so that sufficient substitutes exist for a customer to purchase a substitute item rather than go to a competing store.

Q: Complementary products can be defined as inventories that can be used or distributed together, such as razor blades and razors.

Q: High inventory turnover indicates that a company is taking longer to sell its inventory.

Q: Inventory turnover can be calculated by dividing costs of goods sold by average inventory.

Q: The number of times that inventory is sold in one year is referred to as average inventory.

Q: One way of dealing with dead stock (inventory) is for companies to simply throw it away.

Q: Dead stock (inventory) refers to product for which there is no sales during a 12-month period.

Q: In terms of ABC analysis of inventory, no more than 25% of items should be classified as "A's."

Q: Marginal analysis recognizes that all inventories should not be managed in the same way.

Q: Safety stock can prevent against two problem areas: An increased rate of demand and longer-than-normal replenishment.

Q: Inventory flow diagrams graphically depict the demand for, and replenishment of, inventory.

Q: The EOQ can only be calculated with respect to the number of units to be ordered.

Q: One assumption of the basic EOQ model is a continuous, constant, and known rate of demand.

Q: The EOQ is the point at which carrying costs equal ordering costs.

Q: A fixed order quantity system is more susceptible to stockouts than is a fixed order interval system.

Q: One requirement of a fixed order quantity system is that the inventory must be constantly monitored.