What are the needs for location decision?
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The needs for location decision include proximity to markets, access to suppliers, labor availability, and cost considerations.
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What are the needs for location decision?
The needs for location decision include proximity to markets, access to suppliers, labor availability, and cost considerations.
What is the factor rating technique?
A location method that instills objectivity in evaluating hard-to-evaluate costs, allowing managers to use weighting to make the decision process more objective.
What is clustering in the context of proximity to competitors?
Clustering refers to the location of competing companies near each other, often due to a critical mass of information, talent, venture capital, or natural resources.
What is the formula to calculate cost per unit based on labor cost and production?
Labor cost per day divided by production (units per day) equals cost per unit.
Why is proximity to markets important for services?
Locating near customers is crucial for services like drugstores, restaurants, post offices, or barbers.
What factors should be considered in making a location decision?
Factors to consider include transportation costs, utility availability, local regulations, and environmental impact.
How can exchange rates impact cost structure?
Exchange rates can have a significant impact on cost structure as they change over time, and unfavorable rates may negate any savings.
Why is the factor rating technique popular?
It is popular because a wide variety of factors, both quantitative and qualitative, can be included in the analysis.
What is the factor rating technique?
The factor rating technique is a method used to evaluate and compare different location alternatives based on various factors that are important to the decision-making process. Each factor is assigned a weight based on its importance, and locations are scored against these factors to determine the best option.
In which industries is clustering commonly found?
Clustering is found in both manufacturing and service industries.
How does labor productivity affect total cost in location decisions?
Lower production may increase total cost, so management considers both wage rates and productivity.
How does proximity to markets affect manufacturers?
Manufacturers need to be close to customers due to Just-In-Time (JIT) systems or high transportation costs associated with bulky, heavy, and fragile products.
Why do firms locate near their raw materials and suppliers?
Firms locate near their raw materials and suppliers due to perishable goods, high transportation costs, and bulky perishable raw materials.
What is the factor rating technique?
The factor rating technique is a method used to evaluate potential locations by assigning weights and scores to various factors.
What should businesses consider regarding exchange rates when making location decisions?
Businesses should consider that unfavorable exchange rates may negate any savings and that they can take advantage of favorable exchange rates by relocating to a foreign country.
What types of factors are included in the factor rating technique?
The factors included are called tangible and intangible factors, respectively.
Why do companies prefer to locate near competitors?
Companies like to locate near competitors to benefit from shared resources and market dynamics.
What are the unit costs for production in Connecticut and Juarez?
In Connecticut, the cost is 1.17 per unit.
What is the purpose of the factor rating technique in location decisions?
The factor rating technique is used to evaluate different locations based on various factors, assigning weights and scores to determine the best option.
What types of businesses typically need to be located near their suppliers?
Businesses like bakeries, dairy plants, and frozen seafood processors typically need to be located near their suppliers.
How can location be evaluated using the factor rating technique?
Location can be evaluated by scoring each potential site against the identified factors and calculating a weighted total to determine the best option.
How do worker values impact relocation decisions?
Worker values, such as attitudes towards turnover, unions, and absenteeism, can influence the offers made to current workers if a firm relocates.
What is the most important intangible factor to consider in location decisions?
Labor availability is the most important intangible factor.
What is a significant cost consideration for companies dealing with heavy and bulky raw materials?
Companies face expensive inbound transportation costs for heavy and bulky raw materials.
How are tangible and intangible factors scored in the factor rating technique?
Tangible factors are scored based on measurable criteria, while intangible factors are scored based on subjective assessments.
What challenges do operations managers face when building supply chains across cultures?
Operations managers face significant challenges due to differing cultural attitudes towards punctuality, legal issues, and ethical considerations.
What is the highest-ranking intangible factor in location decisions?
Labor availability is the highest-ranking intangible factor.
What is the Centre of Gravity Technique?
A mathematical technique used for finding the location of a distribution center that minimizes distribution costs.
What weight is assigned to tangible factors in the factor rating technique?
A weight of 2 is assigned to tangible factors.
What is the first step in the factor rating technique?
Develop a list of relevant factors called critical success factors.
Which intangible factor is considered the least important?
Community acceptance is considered the least important intangible factor.
What is a reason for needing facilities near raw materials when there is a reduction in bulk during production?
Facilities need to be near raw materials to minimize transportation costs and ensure efficiency in production.
What is the first step in evaluating alternative locations using tangible factors?
Calculate the total cost for each alternative location.
What does a higher total score indicate in the factor rating technique?
A higher total score indicates a more favorable location based on the evaluated factors.
What factors related to government can affect location decisions?
National, state, and local government attitudes towards private and intellectual property, zoning, pollution, and employment stability can be in flux and affect location decisions.
What weight is assigned to community acceptance in the evaluation of intangible factors?
Community acceptance is assigned a weight of 1.
What are tangible costs in location decisions?
Readily identifiable costs that can be measured with precision, such as utilities, labor, materials, taxes, depreciation, and transportation of raw materials and finished goods.
What factors does the Centre of Gravity Technique consider?
What is the first step in the location decision process?
Selecting a country to operate.
What are the three steps in the Break-Even Analysis method?
What weight is assigned to intangible factors in the factor rating technique?
A weight of 1 is assigned to intangible factors.
How do you evaluate each location in the factor rating technique?
Score each location for each factor.
How is the quality of life rated in Baling?
The quality of life in Baling is rated as Poor.
How should alternative locations be ranked based on their total costs?
The location with the lowest total cost is assigned the highest rank, followed by other locations.
What is the significance of the ranking in the factor rating technique?
The ranking helps to identify the best location among the options evaluated based on their total scores.
How is the importance of intangible factors ranked?
The most important factor is given the highest rank, followed by other factors accordingly.
What are intangible costs in location decisions?
Less easy to quantify costs, including quality of education, public transportation facilities, community attitude, and quality/attitude of prospective employees.
What is the purpose of the Centre of Gravity Technique?
To find the best location for a distribution center that minimizes distribution costs.
What factors should be considered when making a regional or community decision?
Political risks, cultural and economic issues, location of markets, labor talent, and availability of supplies.
What is the objective of Break-Even Analysis?
To determine the quantity to be produced so that the firm can break even.
What is the numerical value assigned to 'Outstanding' in the factor rating technique?
5
How do you calculate the total score for each location in the factor rating technique?
Multiply the weight with the merits of every location for both tangible and intangible factors, then sum the results.
What are the needs for location decisions?
Location decisions are crucial for optimizing operational efficiency, reducing costs, and enhancing market access.
What is the factor rating technique used for?
The factor rating technique is used to evaluate location options.
What is the purpose of assigning a weight to each factor?
To reflect the importance of each factor in the overall evaluation.
What merit should be assigned to the highest-ranking location?
The highest-ranking location should be assigned the highest merit, for example, a merit of 3.
What weight is assigned to quality of life in the factor rating technique?
Quality of life is assigned a weight of 2.
What factors should be considered in making location decisions?
Both tangible and intangible costs, including measurable costs like utilities and labor, as well as less quantifiable aspects like community attitude and employee quality.
How do you calculate the total score for each location using the factor rating technique?
By multiplying the factor's weight with its rating's value for each location.
What are the needs for making a location decision?
Location affects fixed and variable costs, overall risk, and profit. A new location may be necessary if demand exceeds current production capacity, and changes in labor productivity, exchange rates, costs, or community attitudes can also influence this decision.
What are the total costs for each location in RM'000?
Baling: 760, Kodiang: 745.5, Sg. Petani: 781.5, Kulim: 759
What are the annual labor costs for the locations Baling, Kodiang, Sg. Petani, and Kulim?
Baling: RM 350, Kodiang: RM 360, Sg. Petani: RM 375, Kulim: RM 380.
What is the Factor Rating Technique?
A method used to evaluate location alternatives based on various factors.
What are the three types of costs involved in Break-Even Analysis?
i) Fixed cost (FC) ii) Variable cost (VC) iii) Selling Price (SP)
What are some considerations for site decisions?
Site size and cost, transportation systems, zoning restrictions, and proximity of services.
How is 'Very Good' rated in the factor rating technique?
4
How are locations ranked in the factor rating technique?
Locations are ranked by assigning the highest ranking to the highest total score.
What factors affect the selection of plant location?
Factors include proximity to markets and suppliers, labor availability, transportation costs, and local regulations.
What are tangible factors in location decisions?
Factors that can be measured in monetary value, such as labor, transportation, and raw material costs.
How is transportation quality rated across the locations mentioned?
Transportation quality is rated as Good in all locations: Baling, Kodiang, Sg. Petani, and Kulim.
What is the final step in the factor rating technique for location selection?
Choose the best location, which is the one with the highest merit.
What is the rank and weight for transportation quality?
Transportation quality has a rank of 2 and a weight of 3.
How does location impact an organization's costs?
Location affects both fixed and variable costs of the organization.
What is the total score for Baling?
32
Which location has the highest labor cost?
Sg. Petani with 375 RM'000.
What does the Factor Rating Technique involve?
It is a method used to evaluate location alternatives by assigning weights to various factors and scoring each location based on those factors.
What are the annual raw material costs for the locations Baling, Kodiang, Sg. Petani, and Kulim?
Baling: RM 400, Kodiang: RM 375, Sg. Petani: RM 395, Kulim: RM 368.
What role do government incentives play in location decisions?
They can influence the attractiveness of a region and affect costs and availability of utilities.
What rating corresponds to 'Good' in the factor rating technique?
3
What is the first step in evaluating a location using the factor rating technique?
Assign weights to tangible and intangible factors.
What is the factor rating technique used for?
The factor rating technique is used to evaluate different location options based on weighted criteria.
What is the process for analyzing intangible factors in location decisions?
Analyze the intangible factors, rank them by importance, convert the rank into weight, check the ratings, convert ratings into numerical values, calculate the total score for each location, rank the locations by total score, assign merit to each location, and choose the best location.
What are intangible factors in location decisions?
Factors that are hard to measure in monetary value, such as labor availability, proximity to market, and facilities availability.
What triggers the need for a new location?
A new location is necessary if demand has exceeded the current production capacity.
What is the ranking of the locations based on total cost?
What is the total score for Kodiang?
31
What are the rental costs for the locations Baling, Kodiang, Sg. Petani, and Kulim?
Baling: RM 10, Kodiang: RM 10.5, Sg. Petani: RM 11.5, Kulim: RM 11.
How does labor availability impact location decisions?
It affects costs, attitudes towards unions, and overall productivity.
What is the rank of importance for 'Labor availability'?
1
How should the highest-ranking intangible factor be treated?
The highest-ranking factor should be given the highest rank (e.g., rank 1) and the highest weight (e.g., weight of 3).
What is the final step in the factor rating technique?
Recommend the location with the highest point score.
What external factors can influence location decisions?
Changes in labor productivity, exchange rates, costs, community attitudes, shifts in demographics, and customer demand.
What is the rental cost for each location?
Baling: 10, Kodiang: 10.5, Sg. Petani: 11.5, Kulim: 11 (in RM'000).
What is the total score for Sg. Petani?
28
What technique can be used to evaluate the location for Mawar Sari Berhad's new plant?
Factor rating technique.
What is a key consideration regarding environmental impact in site decisions?
Environmental impact issues must be assessed to ensure compliance with regulations.
Which location received the rating of 'Outstanding' for 'Quality of life'?
Kodiang
What numerical values correspond to the ratings 'EXCELLENT' and 'VERY GOOD'?
EXCELLENT = 5 and VERY GOOD = 4.
Which location has the lowest total cost?
Kodiang with 745.5 RM'000.
What is the total score for Kulim?
26
What is the rank of importance for 'Transportation quality'?
2
How is the total score for each location calculated?
The total score is calculated by multiplying the factor's weight with its rating's numerical value.
Which intangible factor has the highest rank of importance?
Labor availability
Which location has the rating of 'Poor' for 'Community acceptance'?
Sg. Petani
What should be done after calculating the total scores for each location?
Rank the locations by assigning the highest ranking to the highest total score.
What weight is assigned to the community acceptance factor?
1
What is the final step in the location selection process?
Choose the best location, which is the one with the highest total score.
What is the weight assigned to the quality of life factor?
2
What weight is assigned to the transportation quality factor?
3
What is the factor rating technique?
The factor rating technique is a systematic method used to evaluate and compare different location options based on various weighted factors that are important to the decision-making process.
What is break-even analysis?
Break-even analysis is a financial calculation to determine the point at which total revenues equal total costs, indicating no profit or loss.
What is the highest total score among the locations listed?
32 (Baling)
How is merit assigned to each alternative location?
The highest-ranking location is assigned the highest merit, with rank 1 given a merit of 4.
What is the rank of Sg. Petani based on the total score?
3
Which location is considered the best based on the factor rating technique?
Baling, with the highest total score of 32.
What is the merit assigned to Kulim?
1
