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The EU has made changes in airline regulation that dramatically affect major European carriers such as British International Air (BIA), KLM, Air France, Alitalia, and Swiss International Air. With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to complement its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in western Europe is actively bidding for BIA's business. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Each is then rated on 12 factors, as shown in the table below. a) Help Miller rank the top three cities that BIA should consider as its new site for servicing aircraft. b) After further investigation, Miller decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. If he lowers the weight of that factor to 30, does the ranking change? c) After Miller makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200-million-euro package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)? DATA FOR PROBLEM 8.25 LOCATION FRANCE ITALY GERMANY FACTOR IMPORTANCE WEIGHT MILAN ROME GENOA PARIS LYON NICE MUNICH BONN Financial incentives 85 8 8 8 7 7 7 7 7 Skilled labor pool 80 4 6 5 9 9 7 10 8 Existing facility 70 3 5 9 9 Wage rates 70 8 4 6 6 4 5 Competition for jobs 70 3 2 8 7 4 Ease of air traffic access 65 4 8 8 4 8 4 6 6 3 4 Real estate cost Communication links 7 9 9 9 Attractiveness to relocating executives 8 3 8 8 Political considerations Expansion possibilities 5 5 Union strength 5 6 40 25 15 10 10 10 5 975660 4 6 10 1 1690 2 298 6 7 6 m1000 - 3 6 8 2 9 9 8 1 5 10 6845 2004 8 6 BERLIN 7 9 2 5 9 5 8 3 8 6 6

The EU has made changes in airline regulation that dramatically affect major European carriers such as British International Air (BIA), KLM, Air France, Alitalia, and Swiss International Air. With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to complement its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in western Europe is actively bidding for BIA's business. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Each is then rated on 12 factors, as shown in the table below. a) Help Miller rank the top three cities that BIA should consider as its new site for servicing aircraft. b) After further investigation, Miller decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. If he lowers the weight of that factor to 30, does the ranking change? c) After Miller makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200-million-euro package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)? DATA FOR PROBLEM 8.25 LOCATION FRANCE ITALY GERMANY FACTOR IMPORTANCE WEIGHT MILAN ROME GENOA PARIS LYON NICE MUNICH BONN Financial incentives 85 8 8 8 7 7 7 7 7 Skilled labor pool 80 4 6 5 9 9 7 10 8 Existing facility 70 3 5 9 9 Wage rates 70 8 4 6 6 4 5 Competition for jobs 70 3 2 8 7 4 Ease of air traffic access 65 4 8 8 4 8 4 6 6 3 4 Real estate cost Communication links 7 9 9 9 Attractiveness to relocating executives 8 3 8 8 Political considerations Expansion possibilities 5 5 Union strength 5 6 40 25 15 10 10 10 5 975660 4 6 10 1 1690 2 298 6 7 6 m1000 - 3 6 8 2 9 9 8 1 5 10 6845 2004 8 6 BERLIN 7 9 2 5 9 5 8 3 8 6 6

Practical Management Science
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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8.25 The EU has made changes in airline regulation that dramatically affect major European carriers such as British International Air (BIA), KLM, Air France, Alitalia, and Swiss International Air. With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to goMrlE=ment its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in western Europe is actively bidding for BIA's business. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Each is then rated on 12 factors, as shown in the table below. a) Help Miller rank the top three cities that BIA should consider as its new site for servicing aircraft. b) After further investigation, Miller decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. If he lowers the weight of that factor to 30, does the ranking change? c) After Miller makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200-million-euro package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)? DATA FOR PROBLEМ в 25 LOCATION ITALY FRANCE GERMANY IMPORTANCE WEIGHT FACTOR MILAN ROME GENOA PARIS LYON NICE MUNICH BONN BERLIN Financial incentives 85 8 8 7 Skilled labor pool 80 9 9 7 10 Existing facility 70 3 Wage rates 70 9 4 6. 4 Competition for jobs 70 7. 4 Ease of air traffic access 65 4 8 4 8 Real estate cost 40 4 6 3 4 Communication links 25 6. 10 Attractiveness to relocating executives 15 4 6. 6. 2 Political considerations 10 6. 6 Expansion possibilities Union strength 10 10 2 8 1 5 4 10 1 5 6 6 25 9650 700 22 N90 76
Transcribed Image Text:8.25 The EU has made changes in airline regulation that dramatically affect major European carriers such as British International Air (BIA), KLM, Air France, Alitalia, and Swiss International Air. With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to goMrlE=ment its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in western Europe is actively bidding for BIA's business. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Each is then rated on 12 factors, as shown in the table below. a) Help Miller rank the top three cities that BIA should consider as its new site for servicing aircraft. b) After further investigation, Miller decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. If he lowers the weight of that factor to 30, does the ranking change? c) After Miller makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200-million-euro package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)? DATA FOR PROBLEМ в 25 LOCATION ITALY FRANCE GERMANY IMPORTANCE WEIGHT FACTOR MILAN ROME GENOA PARIS LYON NICE MUNICH BONN BERLIN Financial incentives 85 8 8 7 Skilled labor pool 80 9 9 7 10 Existing facility 70 3 Wage rates 70 9 4 6. 4 Competition for jobs 70 7. 4 Ease of air traffic access 65 4 8 4 8 Real estate cost 40 4 6 3 4 Communication links 25 6. 10 Attractiveness to relocating executives 15 4 6. 6. 2 Political considerations 10 6. 6 Expansion possibilities Union strength 10 10 2 8 1 5 4 10 1 5 6 6 25 9650 700 22 N90 76
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