Which of the following methods is considered as intangible cost related to a location decision?

CHAPTER 8: LOCATION STRATEGIES

TRUE/FALSE

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.

False (Global company profile, easy)

2.Generally, the objective of the location decision is to maximize the firm's profit.

False (The strategic importance of location, easy)

3.Lists have been developed that rank countries on issues such as “competitiveness” and

“corruption.”

True (Factors that affect location decisions, easy)

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.

True (The strategic importance of location, moderate)

5.The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.

True (Factors that affect location decisions, moderate)

6.For a location decision, labor productivity may be important in isolation, but low wage rates are a

more important criterion.

False (Factors that affect location decisions, moderate)

7.Unfavorable exchange rates can offset other savings in a location decision.

True (Factors that affect location decisions, moderate)

8. An example of an intangible cost, as it relates to location decisions, is the quality of education.

True (Factors that affect location decisions, moderate)

9.In location decisions, intangible costs are easier to measure than tangible costs.

False (Factors that affect location decisions, moderate)

10.Location decisions are based on many things, including costs, revenues, incentives, attitudes, and

intangibles, but not on ethical considerations.

False (Factors that influence location decisions, easy) {AACSB: Ethical Reasoning}

11.Manufacturers may want to locate close to their customers, if the transportation of finished goods is

expensive or difficult.

True (Factors that affect location decisions, moderate)

12.One reason for a firm locating near its competitors is the presence of a major resource it needs.

True (Factors that affect location decisions, moderate)

13.The graphic approach to location break-even analysis displays the range of volume over which

each location is preferable.

True (Methods of evaluating location alternatives, moderate)

189

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Which of the following methods is a mathematical technique used for finding the best location for a single distribution point that services?

Which of the following is a location analysis technique typically employed by service organization?

When making a location decision what is more important than low wage?

Which of the following assumptions is not associated with strategies for goods producing location decisions?