A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented in the table below. Table 1 Costs A B C Fixed 500,000 600,000 800,000 Variable 40 30 20 Indicate over what range, each of the alternatives A, B, C is the low-cost choice.
- A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented in the table below.
Table 1
|
Costs |
A |
B |
C |
|
Fixed |
500,000 |
600,000 |
800,000 |
|
Variable |
40 |
30 |
20 |
- Indicate over what range, each of the alternatives A, B, C is the low-cost choice.
b) A larger and more modern post office is to be constructed at a new location in Sally Spring Georgia. Growing suburbs caused a shift in the population density from where it was 30 years ago when the current facility was built. Andy Browne, the postmaster asked his assistants to draw a grid map of the seven points where mail is picked up and delivered in bulk. The coordinates and trips per day to and from the seven mail source points and the current main post office are shown in the table below.
|
Mail Source Point |
Round Trips per day |
X coordinate |
Y coordinate |
|
1 |
6 |
2 |
8 |
|
2 |
3 |
6 |
1 |
|
3 |
3 |
8 |
5 |
|
4 |
3 |
13 |
3 |
|
5 |
2 |
15 |
10 |
|
6 |
7 |
6 |
14 |
|
|
|
|
|
- Calculate the centre of gravity as a possible location for the new facility.
- A clothing chain is considering two different locations for a new retail outlet. The organization has identified the four factors listed in the following table as the basis for evaluation, and it has assigned weights as shown. The manager has rated each location on each factor, on a 100-point basis (higher scores are better), as shown under the respective columns for Barclay and Chester.
|
Factor |
Factor Description |
Weight |
Georgetown |
Biabou |
|
1 |
Average community income |
.40 |
75 |
70 |
|
2 |
Community growth potential |
.25 |
60 |
80 |
|
3 |
Availability of public transportation |
.15 |
45 |
90 |
|
4 |
Labor cost |
.20 |
80 |
60 |
- Calculate the weighted score for each alternative location.
- Which location should be chosen?
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