Om300 Exam 3 Chilcutt QUESTIONS
AND CORRECT ANSWERS
Where is the "superhub" for Fedex located? - CORRECT ANSWER Memphis, Tennessee
Companies often make location decisions based on the economics of transportation. Firms that used
this strategy with which of the following? - CORRECT ANSWER rivers and ports
What is the major difference in focus between a location decision in the service sector vs. the
manufacturing sector? - CORRECT ANSWER the focus in service is on revenue
maximization, while the focus in manufacturing is on cost minimization.
Which of the following statements is NOT true regarding location decisions? - CORRECT ANSWER
Once management is committed to a specific location, many costs become relatively easy to
reduce
In Myanmar, seven laborers, each making the equivalent of $2.50 per day, can produce 38 unites per
day. In China, nine laborers, each making the equivalent of $2.25 per day, can produce 45 units. In
Billings, Montana, three laborers, each making $60.00 per day, can make 105 units.
Based on labor cost per unit only, the most economical location to produce the item is ________, with
a labor cost unit of $____. - CORRECT ANSWER China; $0.45
In Myanmar, seven laborers, each making the equivalent of $3.00 per day, can produce 38 units per
day. In China, eleven laborers, each making the equivalent of $2.00 per day, can produce 45 units. In
Billings, Montana, three laborers, each making $63.00 per day, can make 102 units.
Shipping cost from Myanmar to Denver, Colorado, the final destination, is $2.00 per unit. Shipping
cost from China to Denver is $1.25 per unit, while the shipping cost from Billings, Montana to
Denver is $0.25 per unit.
Based on total costs (labor and transportation) per unit, the most economical location to produce the
item is _____________, with a total cost (labor and transportation) per unit of $______. - CORRECT
ANSWER China; $1.74
AND CORRECT ANSWERS
Where is the "superhub" for Fedex located? - CORRECT ANSWER Memphis, Tennessee
Companies often make location decisions based on the economics of transportation. Firms that used
this strategy with which of the following? - CORRECT ANSWER rivers and ports
What is the major difference in focus between a location decision in the service sector vs. the
manufacturing sector? - CORRECT ANSWER the focus in service is on revenue
maximization, while the focus in manufacturing is on cost minimization.
Which of the following statements is NOT true regarding location decisions? - CORRECT ANSWER
Once management is committed to a specific location, many costs become relatively easy to
reduce
In Myanmar, seven laborers, each making the equivalent of $2.50 per day, can produce 38 unites per
day. In China, nine laborers, each making the equivalent of $2.25 per day, can produce 45 units. In
Billings, Montana, three laborers, each making $60.00 per day, can make 105 units.
Based on labor cost per unit only, the most economical location to produce the item is ________, with
a labor cost unit of $____. - CORRECT ANSWER China; $0.45
In Myanmar, seven laborers, each making the equivalent of $3.00 per day, can produce 38 units per
day. In China, eleven laborers, each making the equivalent of $2.00 per day, can produce 45 units. In
Billings, Montana, three laborers, each making $63.00 per day, can make 102 units.
Shipping cost from Myanmar to Denver, Colorado, the final destination, is $2.00 per unit. Shipping
cost from China to Denver is $1.25 per unit, while the shipping cost from Billings, Montana to
Denver is $0.25 per unit.
Based on total costs (labor and transportation) per unit, the most economical location to produce the
item is _____________, with a total cost (labor and transportation) per unit of $______. - CORRECT
ANSWER China; $1.74
