OIM 352 Chapter 8 Excel HW

Problems 1 Location cost profit Omaha Kansas City Annual fixed costs ($ millions) $1.20 $1.40 Variable cost per unit $36 $47 Expected annual demand (units) 8,000 12,000 Fixed costs per yr (Variable cost per unit x Q) Omaha 1,480,000 1,200,000 36 8,000 Kansas City 2,220,000 1,400,000 47 12,000 Kansas City will produce a greater profit of $256,000. ^could be due to the higher qu 9 Factor rating Location Score Factor (100 pts each) Weight A B C Convenience 0.15 80 70 60 Parking facilities 0.20 72 76 92 Display area 0.18 88 90 90 Shopper traffic 0.27 94 86 80 Operating costs 0.10 98 90 82 Neighborhood 0.10 96 85 75 1.00 12 Center of gravity "same" Location x y A 3 7 B 8 2 C 4 6 D 4 1 The new warehouse should be E 6 4 SUM 25 20 Average 5 4 A newly formed firm must decide on a plant location. There are two alternatives under consideration: materials or locate near the major customers. Locating near the raw materials will result in lower fixe compared to locating near the market, but the owners believe there would be a loss in sales volume b favor local suppliers. Revenue per unit will be $185 in either case. Using the following information, de would produce the greater profit. Total Revenue ($185*Q) Using the following factor ratings, determine which location alternative (A, B, or C) should be chosen composite score. A toy manufacturer produces toys in five locations throughout the country. Raw materials (primarily barrels of shipped from a new, centralized warehouse whose location is to be determined. The monthly quantities to be s same . A coordinate system has been established, and the coordinates of each location have been determined a coordinates of the centralized warehouse. The new coordinates for the c warehouse is (5,4)

13 Center of gravity "different" Location x y Weekly Quantity x*Q A 5 7 15 75 B 6 9 20 120 C 3 9 25 75 D 9 4 30 270 SUM 90 540 6 The central shipping point should be located at (6,7)… A clothing manufacturer produces women’s clothes at four locations in Mexico. Relative locations hav shown in the table below. The location of a central shipping point for bolts of cloth must now be dete be shipped to each location are also shown in the table. Determine the coordinates of the location tha costs. The new coordinates that will minimize distribution costs is (6,7)

y*Q 105 180 225 120 630 7 ve been determined, as ermined. Weekly quantities to at will minimize distribution

Kansas City $ 185 $ 47 $ 1,400,000 12,000 $ 256,000