S.A., has decided to open a new factory to introduce its products in the French market. For thispurpose, it is considering the following possible locations: Barcelona, Pamplona, Lyon and Paris. Theestimated profits for the next 5 years for each alternative are shown in the following table (inthousands of euros) depending on the variation in demand.Calculate the optimal decision if it is estimated that the probability that demand increases by 20% is30%, that it increases by 10% is 40%, that it remains stable is 25% and that it decreases is 5%.IncreaseIncreaseDecreaseStableDEMANDdemand10%10%demand20%demanddemanddemandBarcelona15022016050Pamplona20023014020Lyon175250150-10Paris230215200-50

Find the Given details below: Given details: Demand Increase 20 % Demand Increase 10 % Demand…

Answered: S.A., has decided to open a new factory…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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3. Consolidated Refineries, headquartered in Houston, must decide among three sites for the construction of a new oil-processing center. The firm has selected the six factors listed below as a basis for evaluation and has assigned rating weights from 1 to 5 on each factor: Factor 1 2 3 4 5 6 Factor Name Proximity to port facilities Power source availability and cost Workforce attitude and cost Distance from Houston Community desirability Equipment suppliers in area Rating Weight 5 3 4 2 2 3 Management has rated each location for each factor on a 1- to 100-point basis. Factor Location A Location B Location C 1 100 80 80 2 80 70 100 3 30 60 70 4 10 80 60 5 90 60 80 6 50 60 90 a. Which site will be recommended based on total weighted scores? b. If location B's score for Proximity to port facilities was reset at 90, how would the result change? c. What score would location B need on Proximity to port facilities to change its ranking?
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Metro has initiated discussions on attracting rail service. A depot would need to be constructed, which would require $2.5million in land and $7.5 million in construction costs. Annual operating and maintenance costs (O&M) for the facility would be $150,000, and personnel costs would be an additional $110,000. Other assorted costs would be born by the railroad and federal authorities. Annual benefits (B) of the rail service are estimated as listed: $120,000 for Railroad annual payments, $25,000 for Rail tax charged to passengers, $20,000 for Convenience benefits to local residents, and $12,000 for Additional tourism dollars for Metro. Apply the B-C ratio method, with a MARR of 8% per year and 20 year study period, to determine if the rail service should be established. a. BC ratio=2.12, good project b. BC ratio=-1.76, good project c. BC ratio=1.69, good project d. BC ratio=0.14, not good project
A plastic manufacturing company is considering 2 alternative locations for a new facility. The management considered 2 alternatives: Sta. Rosa and Sta. Rita. The fixed costs for Sta. Rosa is Php1M and variable cost is Php25 per unit. On the other hand, the fixed costs for Sta. Rita is Php1.5M and variable cost is Php23 per unit. 1. If the company plans on producing 50,000 units which location would be more attractive? 2. At what volume the two alternatives equal in cost?
The least cost theory is based upon finding the location with the lowest marginal and average total cost. True or False?
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Draw a Decision Tree on this Alternative Location for New Warehouse Problem indicating graphically the sequences of decision alternatives and states of nature that provide the six possible payoffs.
Problem 4
Carlisle Tire and Rubber, Inc., is considering expanding production to meet potential increases in the demand for one of its tire products. Carlisle’s alternatives are to construct a new plant, expand the existing plant, or do nothing in the short run. The market for this particular tire product may expand, remain stable, or contract. Carlisle’s marketing department estimates the probabilities of these market outcomes to be 0.25, 0.35, and 0.40, respectively. The file P06_31.xlsx (picture of given excel file is attached) contains Carlisle’s payoffs and costs for the various combinations of decisions and outcomes. Identify the strategy that maximizes this tire manufacturer’s expected profit. Perform a sensitivity analysis on the optimal decision, letting each of the monetary inputs vary one at a time plus or minus 10% from its base value, and summarize your findings. Which of the inputs appears to have the largest effect on the best solution?
A manufacturing firm is considering three potential locations for a new parts manufacturing facility. A consulting firm has assessed three sites based on the four factors supplied by management as critical to the location's success. The factor weights and the consultant team scores are given in table 5 below. Scores are based on 50 = best. Which location should be selected?
The Giant Farmer Company processes food for sale in discount food stores. It has two plants: one in Chicago and one in Houston. The company also operates warehouses in Miami, Florida; Denver, Colorado; Lincoln, Nebraska; and Jackson, Mississippi. Forecasts indicate that demand soon will exceed supply and that a new plant with a capacity of 8,000 cases per week is needed. The question is where to locate the new plant. Three potential sites are Buffalo, Atlanta, and Memphis. The two tables below give data on capacities, forecasted demand, and shipping costs that have been gathered. Plant Chicago Houston Capacity (cases per week) New plant Warehouse Plant Chicago Houston Buffalo (alternative 1) Atlanta (alternative 2) Memphis (alternative 3) For each alternative new plant location, determine the total cost of the shipping pattern that will minimize total transportation costs. Where should the new plant be located? If the new plant is located in Buffalo, the optimal cost is $ (Enter your…
K Subway, with more than 27,000 outlets in the U.S., is planning for a new restaurant in Buffalo, New York. Three locations are being considered. The following table gives the factors for each site. Factor Space Costs Traffic density Neighborhood income Zoning laws a) Based on the given information, the best location in Buffalo for Subway to open the new restaurant is Weight 0.25 0.25 0.20 0.15 0.15 Maitland 65 40 55 45 85 Baptist Church 75 85 85 70 20 Northside Mall 80 25 55 35 85 with a

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