Ch. 8 Flashcards
Capacity is the maximum level of output of goods and/or services that a given system can potentially produce over a set period of time
Operating Capacity
Ratio of actual output to the potential output; potential output represents the maximum amount of output that can be produced in the short-run with the existent stock of capital
Capacity Utilization
What is an example of an intangible cost/benefit as it relates to location decisions?
Tangible cost- labor cost in china
Intangible cost- quality of living in china
What is a common reason for manufacturers to locate close to their customers?
When it is hard or expensive to transport the finished goods to the consumer
What indicator might an operations manager use to evaluate political risk of a country?
Corruption in the country
What is a major reason fast food restaurants often are found in close proximity to each other?
Proximity to competitors (clustering) when a major resource is found in that region.
What are five factors that have fostered globalization?
market economics, • better international communications, • more rapid, reliable travel and shipping, • ease of capital flow between countries, and • high differences in labor costs
What is it called when competing companies locate next to each other?
Clustering
What Location Analysis method best considers intangible costs related to a location decision?
Factor-Rating method
What is an approach to location analysis that includes both qualitative and quantitative considerations?
Factor-Rating method
A regional bookstore chain wants to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis?
Center of Gravity approach
What does the transportation model minimize when applied to location analysis?
Total production and transportation costs
A grocery chain is deciding on where to locate its new distribution center (DC). The new DC will serve four grocery stores, each with a demand of 10,000 units. What location analysis method would provide a starting point for a location to build a new distribution center?
Location Volume Analysis
What location analysis methods are typically employed by service organizations?
Service Location Strategy
A system that stores and displays info that can be linked to a geographic location
Geographic Information system
