TF Qu. 3 You can t make a mistake by locating...
You can 't make a mistake by locating where labor costs are low. | True | | False |
Labor costs are only occasionally a primary consideration in location decisions.
TF Qu. 7 A strategy that emphasizes convenience for ...
A strategy that emphasizes convenience for the customers would probably select a single very large facility. | True | | False |
Convenience for customers would tend to necessitate small, dispersed facilities.
TF Qu. 20 The center of gravity method of location ...
The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal. | True | | False |
Center of gravity approaches factor
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A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $185 in either case. |
| Omaha | Kansas City | Annual fixed costs ($ millions) | $ | 1.2 | $ | 1.4 | Variable cost per unit | $ | 36 | $ | 47 | Expected annual demand (units) | 8,000 | 12,000 | |
Using the above information, determine which location would produce the greater profit. (Omit the "$" sign in your response.) |
Kansas City would produce the greater gross profit of $ . |
rev: 03_27_2012
Explanation: Profit = (Rev/unit – VC/unit)Q – FC | | Omaha: ($185/unit – $36/unit)8,000 units – $1,200,000 = –$8,000 | | Kansas City: ($185/unit – $47/unit)12,000 units – $1,400,000 = $256,000 |
TF Qu. 2 One way that project management differs ...
One way that project management differs from management of more traditional activities is because of
The company also should consider other factors in choosing the location of the plant including:
| Research the area in which your business is located, and do calculations in the
The best location for the store would be Casstown and Denton. These two location have the same value for the right hand side and the left hand side. This means that the return from both locations remains virtually the same over the course of business operations. Most of the input is absorbed by the output and the returns are higher.
d. Assuming the same sales mix of these two products, what are the contribution margins and break-even points by product?
Hypothesis 2b: The location chosen for a new production subsidiary contributes to increasing the uncertainty of
Location is an important part of the internal influence as it is needed to be easily accessed. It is important for the business to be located in a place that is easy to access resources for production and to minimise distribution cost and/or close to the target market for sales such as consumers. In choosing a location the business should consider the 5 areas in locating. These include where it is visible, the cost of property, proximity to suppliers, proximity to customers and proximity to support
Being in the right location is a key ingredient in a business 's success. If a company selects the wrong location, it may have adequate access to customers, workers, transportation, materials, and so on. Consequently, location often plays a significant role in a company 's profit and overall success. A location strategy is a plan for obtaining the optimal location for a company by identifying company needs and objectives, and searching for locations with offerings that are compatible with these needs and objectives. Generally, this means the firm will attempt to maximize opportunity while minimizing costs and risks.
To make good decisions in both areas managers should assess needs, develop alternatives, and evaluate the alternatives. A good tool to facilitate location analysis is the break-even analysis because it evaluates location decisions based on cost values. Another good tool is the transportation method because it evaluates the cost impact of adding sites to the network of current facilities.
Third, the business is required to sincerely consider the place where the company will allocate or distribute the product because the corporate marketing executives need to settle on someplace to put the product or service up for sale. For example, will the firm follow a path of exclusive limited channels to sell their product in an effort to distribute at lesser costs and try to give the impression of a superlative product or service? Conversely, will the company do better if they distribute the product in a broad manner so consumers may have an easier time acquiring the product in which it seems plausible that the potential to generate higher
In the first paragraph of chapter 2 ‘Project Management’, the traditional way of project management is explained. The basic idea behind the traditional approach is that projects are relatively predictable and the goal is optimization and efficiency in following a project plan to finalize the project within the triple constraint (Spundak, 2014). The traditional approach emphasizes that a uniform way of doing project management is the main reason for why it was introduced; however, prescribing that the same methods and techniques could be applied to all projects in the same way, especially when companies are getting more innovative, is not quite realistic anymore. ‘Projects become progressively complex, with a higher number of tasks and complex interrelations, while the traditional project management approach is based on mostly hierarchical and linear task relations and cannot properly reflect all complexity and dynamics of today’s projects’ (Williams, Thomas, & Hodgson, 2006).
The problem of facility location is faced by both new and existing businesses, andthis is critical to a company’s success. An important element in designing a company’ssupply chain is the location of its facilities. Manufacturing and service companies’location decisions are guided by a variety of criteria defined by competitive
business and where we will place. This choice will depend in part on the proper functioning Business. We should not rush in choosing the premises and that a wrong decision can result in the future a change of room with all the expense and inconvenience that entails. Before drinking a decision we must consider the needs of our company in the future: possible extensions, new clients, etc. The importance of the location of our company depends on the activity in which we engage,
Where your customers are determines where the best location for your business to be is. It determines the costs of your business and the expected profits. In addition, it determines whether your
This work explores facilities location as a widely studied problem in current marketing trends. Further, it breaks down facility location into area description, placing facilities, feasible sites and assigning customers among others. In addition, facility location seeks to minimize transport costs and explore greater markets. The research has explored factors such as areas population, demand (present and future), and other factors affecting facility location. The methodological approaches employed are multiple attributives in nature and alternative ranking quantitative methods.
The company has to decide between the two locations based on their virtues, availability and higher margin of profit.