Chapter 18 Location, Facilities and Layout

Question 1

***Why Is Location Important?

Answer 1

• Affects essential portions of your cost structure including transportation and distribution
• Impacts customer satisfaction and overall levels of risk and profitability

Question 2

***Location needs for manufacturers (Calfs)

Answer 2

CALFS

• Customer service
• access to suppliers
• laws and regulations
• Facilities and distribution costs
• Skilled labor pool

Question 3

***Location needs for Wholesalers (I pet)

Answer 3

I Pet

• Incentives and regulations
• Proximity to customers and suppliers
• Economical distribution costs
• Tangible costs of facilities

Question 4

***Location needs for Retailers

Answer 4

• Drawing power
• Demographics
• Traffic generators
• Competitor locations
• Selling space needed
• Rental costs

Question 5

***Simplest way to select location is by using the Factor-rating method

Answer 5

1. Develop a list of critical factors.
2. Determine “weight” of each factor relative to importance.
3. Create a measurement scale.
4. Score each location for each factor using scale.
5. Multiply factor weight times factor score (for each factor in each location).
6. Compare sums of locations’ weighted factors.

Question 6

***geographic information systems

Answer 6

include demographic data, maps, topographic data, major transportation routes, and so on.

Question 7

***Center-of-gravity method—used to locate a distribution center by judging:

Answer 7

• Locations of the destinations
• How much product will ship to destinations
• Frequency of delivery
• Cost of delivery

Question 8

• **Parking is required for the following, which is not correct?
• employees
• commercial vehicles
• handicapped
• VIP

Answer 8

VIP is not required

Question 9

***what is a traffic generator?

Answer 9

location placed by people coming into your store, example a toy store next to a daycare center

Question 10

***What is a selling space?

Answer 10

takes sales value devices by # of sales per SQ.FT. of amount of sales

Question 11

***If you have to change location it is very _____?

Answer 11

expensive

Question 12

***Retail facilities must meet all of the following (SALSA Picante)

Answer 12

• Space for offices, storage, restrooms, deliveries, special needs, etc.
• Appropriate selling area and configuration of that space
• Lighting and security
• Signage for rules/regulations
• Adequate customer parking
• Permission to complete necessary changes (or improvements to be done by landlord)