final exam-supply chain
Topic 7:
1. How does a raw material’s status as pure, weight-losing, or weight-gaining influence the facility location decision? P178
Pure materials that lose no weight in processing, the processing point can be located anywhere between production and consumer.
Weight-losing products, processing plant should be near their source in order to avoid the payment of unnecessary transportation charges.
As weight-gaining (gain weight during processing), the processing point should be close to the market.
2. Discuss the factors that influence the number of facilities that a firm chooses to operate.p176
Facilities are generally added when service levels become unacceptable.
Software packages exist to help in determining the number and location of facilities.
Key issue- time it takes to get from facility to majority of the U.S. population
3. Discuss advantages and disadvantages to grid systems such as the centre-of-gravity and weighted centre-of-gravity approaches.p187-188
Advantage: Grid system can be used for locating a single facility so that the distance to existing facilities is minimized. By extension, transportation costs are minimized as well. In addition, it is relatively simple to apply, and calculations can be done relatively quickly.
Disadvantage: the relative simplicity means that is very sophisticated, adjustments have to be made to take into account real-world considerations such as taxes, wage rates in particular locations and the fact that transport rate taper with increased distances. Above factors increase the complexity.
4. How do transportation considerations influence facility location decisions? P181
Transportation availability and cost： Transportation is a major factor in logistics costs; limited competition generally results in higher costs.
5. What is a free trade zone? What functions might be preferred in it? P186
It refers to highly specialized sites where a company can locate without being subjected to duties and
1. How does a raw material’s status as pure, weight-losing, or weight-gaining influence the facility location decision? P178
Pure materials that lose no weight in processing, the processing point can be located anywhere between production and consumer.
Weight-losing products, processing plant should be near their source in order to avoid the payment of unnecessary transportation charges.
As weight-gaining (gain weight during processing), the processing point should be close to the market.
2. Discuss the factors that influence the number of facilities that a firm chooses to operate.p176
Facilities are generally added when service levels become unacceptable.
Software packages exist to help in determining the number and location of facilities.
Key issue- time it takes to get from facility to majority of the U.S. population
3. Discuss advantages and disadvantages to grid systems such as the centre-of-gravity and weighted centre-of-gravity approaches.p187-188
Advantage: Grid system can be used for locating a single facility so that the distance to existing facilities is minimized. By extension, transportation costs are minimized as well. In addition, it is relatively simple to apply, and calculations can be done relatively quickly.
Disadvantage: the relative simplicity means that is very sophisticated, adjustments have to be made to take into account real-world considerations such as taxes, wage rates in particular locations and the fact that transport rate taper with increased distances. Above factors increase the complexity.
4. How do transportation considerations influence facility location decisions? P181
Transportation availability and cost： Transportation is a major factor in logistics costs; limited competition generally results in higher costs.
5. What is a free trade zone? What functions might be preferred in it? P186
It refers to highly specialized sites where a company can locate without being subjected to duties and