The First Step in the Factor Rating Method for Evaluating

question 14

Multiple Choice

The first step in the factor rating method for evaluating location alternatives is what?

• A) select a scale by which to evaluate each alternative relative to each factor
• B) evaluate each alternative relative to each factor
• C) select the alternative with the highest score
• D) identify dominant factors
• E) assign weights to factors reflecting the importance of each factor relative to the other factors

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Definitions:

Cash Cycle

The period it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Inventory

The total amount of goods and materials held by a company intended for sale or production.

Total Inventory Cost

Total inventory cost includes all costs associated with holding and managing inventory, such as purchasing, storing, and handling costs.

Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, and opportunity costs, among others.