Location Planning and Analysis Flashcards
True or False. The need for location decisions is a part of a marketing strategy to expand markets
True
The nature of location decisions
strategic importance
objectives
supply chain considerations
location options
Closely tied to an organization’s strategies
Strategic importance
Profit potential or cost and customer service
objectives
Determining the number and location of facilities.
supply chain considerations
Add new locations while retaining existing ones
Location options
True or False. “Only one product is involved” is an assumption in Location cost-volume-profit analysis
True
formula for total cost
Total Cost = FC + v x Q
formula for total profit
Total profit = Q (R – v) – FC
Provides a rational basis for evaluation and facilitates comparison among alternatives by establishing a composite value for each alternative that summarizes all related factors.
Factor rating
Method for locating a distribution center that minimizes distribution cost
the center of gravity method
Decision based on movement costs of raw materials or finished goods
Transportation model
Requirements for transportation model
1 List of origins and each one’s capacity
2 List of destinations and each one’s demand
3 Unit cost of shipping
True or False. “Items to be shipped are heterogeneous” is an assumption in transportation model.
False. Homogeneous
