Principles Of Operations Management
Principles Of Operations Management
11th Edition
ISBN: 9780135173930
Author: RENDER, Barry, HEIZER, Jay, Munson, Chuck
Publisher: Pearson,
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Chapter 8, Problem 31P
Summary Introduction

To determine: The center of gravity location for the new proposed facility.

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Williams Auto Top Carriers currently maintains plants in Atlanta and Tulsa to supply auto top carriers to distribution centers in Los Angeles and New York. Because of expanding demand, Williams has decided to open a third plant and has narrowed the choice to one ot two cities – New Orleans and Houston. Table below provides pertinent production and distribution costs as well as plant capacities and distribution demands. Which of the new locations, in combination with the existing plants and distribution centers, yields a lower cost for the firm? From Plants To Distribution centers Normal production Unit production cost Los Angeles New York Existing plants      Atlanta      Tulsa   $8 $4   $5 $7   600 900   $6 $5 Proposed locations      New Orleans      Houston   $5 $4   $6 $6a   500 500   $4 (anticipated) $3 (anticipated) Forecast demand 800 1,200 2,000   a – Indicates distribution cost (shipping, handling, storage) will be $6 per…
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