Manufacturing site location is an important consideration in determini

Manufacturing site location is an important consideration in determining the optimal deployment of a firm's production resources, but one that is usually given only limited attention. Decisions about location are often based purely on quantitative analysis that trade off transportation costs, economies of scales, and other cost-based variables. This practice, however, can lead to focus only on easily quantifiable factors. A further disadvantage of strictly cost-based methods is that they tend to focus on cost advantage factors, which are often transitory. Government regulations, tax systems, and exchange rates can quickly change. Strategies based on such parameters may eventually be rendered obsolete by the very factors that first created an advantage.

In contrast, qualitative issues, which are frequently neglected in choosing manufacturing site locations, are often central to creating and supporting a competitive advantage. For example, the level of skills possessed by the local workforce varies with location; consequently, location can affect the ability of firms to implement skill-based process technologies. When formulating a site location strategy, companies should therefore emphasize qualitative factors to ensure that that the chosen strategy supports the company's overall business strategy. Only after establishing a set of desirable location options should companies refine choices using cost-based factors.

The passage suggests which of the following concerning qualitative methods used in choosing sites?

A) They are more likely than are quantitative methods to identify issues crucial to maintaining a competitive advantage.
B) They are least useful to companies with relatively low levels of manufacturing technology.
C) They have little value when applied to decisions other than choice of site.
D) They are more risky for decision-makers than are quantitative methods.
E) They are used more frequently by multinational corporations than by companies with strictly domestic operations.


Information in the passage suggests which of the following about a company that gives primary consideration to favorable exchange rates in choosing the locations of its manufacturing sites?

A) It risks losing its competitive advantage as a result of changes in exchange rates.
B) It ignores the more stable nature of other quantitative parameters.
C) It loses the ability to implement sill-based process technologies at a later time.
D) It acquires a competitive advantage over manufacturers with higher transportation costs.
E) It acquires a slight competitive advantage over manufacturers with more highly skilled workforce


According to the passage, analysis of quantitative factors is best used for which of the following?

A) Determining strategies for offsetting qualitative disadvantage in manufacturing site locations
B) Evaluating manufacturing site-location parameters affecting long-term competitive advantage
C) Choosing manufacturing site locations that have access to optimal workforce populations
D) Narrowing manufacturing site-location options arrived at through qualitative analysis
E) Making decisions about business considerations other than location of manufacturing sites