Which of the Following Statements About Locating Facilities in the Service

question 19

Multiple Choice

Which of the following statements about locating facilities in the service sector is best?

• A) The factors that apply to manufacturing firms often also apply to service facilities, but the impact of the location on sales and customer satisfaction is an important addition.
• B) Management should avoid locating facilities where competitors are already well established, as illustrated by new car showrooms.
• C) Creating a critical mass is a strategy that avoids locating near competing firms.
• D) "Site specific" factors are the main reason for locating warehousing and distribution operations near the customer.

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Definitions:

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, expressed as a percentage of the mean, often used to assess the risk of an investment relative to its expected return.

Historical Excess Returns

The returns on an investment or portfolio in excess of a benchmark or risk-free rate, assessed over a specific historical period.

Geometric Mean Return

The average rate of return on an investment that takes into account the effects of compounding.

Small-Firm Stocks

Equity shares of smaller companies that are often characterized by higher growth potential and higher risk compared to large-cap stocks.