A Major Problem in a Plant Location Decision Based on the Factor-Rating

question 41

True/False

A major problem in a plant location decision based on the factor-rating system is that simple point-rating schemes do not account for the wide variance of costs that may occur within each factor used in the analysis.

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Definitions:

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.

Diversification

Diversification is an investment strategy that involves spreading investments across various assets to reduce risk and increase the potential for returns.

Positively Correlated

A relationship between two variables in which both variables move in the same direction.

Pooling

In economics, pooling is the amalgamation of resources or interests by several parties to maximize benefit or reduce risk.