Operations Management, Cdn. Ed., 3e (Heizer/Render/Griffin)
Chapter 8 Location Strategies
1) FedEx chose Memphis, Tennessee, for its central location, or "hub," primarily because of the
incentives offered by the city of Memphis and the state of Tennessee.
Answer: FALSE
Diff: 1 Type: TF
Skill: knowledge
Objective: Global company profile
2) Generally, the objective of the location decision is to maximize the firm's profit.
Answer: FALSE
Diff: 1 Type: TF
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions
3) Lists have been developed that rank countries on issues such as "competitiveness" and
"corruption."
Answer: TRUE
Diff: 1 Type: TF
Skill: knowledge
Objective: LO1 Identify and explain seven major factors that affect location decisions
4) When innovation replaces cost as a firm's focus for location decisions, the presence of other
state-of-the-art firms is a plus, not a negative, for the firm's competitiveness.
Answer: TRUE
Diff: 2 Type: TF
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions
5) The ratio of labour cost per day to productivity, in units per day, is the labour cost per unit.
Answer: TRUE
Diff: 2 Type: TF
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions
6) For a location decision, labour productivity may be important in isolation, but low wage rates
are a more important criterion.
Answer: FALSE
Diff: 2 Type: TF
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions
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Transeast Airlines flies planes on the following route: L.A.–Houston–N.Y.–Miami–L.A. The length (in miles) of each segment of this trip is as follows: L.A.–Houston, 1,500 miles; Houston–N.Y., 1,700 miles, N.Y.–Miami, 1,300 miles, Miami–L.A., 2,700 miles. At each stop, the plane may purchase up to 10,000 gallons of fuel. The price of fuel at each city is as follows: L.A., 88¢; Houston. 1.5¢; N.Y., $1.05; Miami. 95¢. The plane’s fuel tank can hold at most 12,000 gallons. To allow for the possibility of circling over a landing site, we require that the ending fuel level for each leg of the flight be at least 600 gallons. The number of gallons used per mile on each leg of the flight is 1 + (average fuel level on leg of flight/2,000) To simplify matters, assume that the average fuel level on any leg of the flight is$$$\frac{\text { (Fuel level at start of leg) }+(\text { fiuel level at end of leg) }}{2}$ Formulate an LP that can be used to minimize the fuel cost incurred in completing the schedule.
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