Concept explainers
A
Interpretation: The location of construction of Phoenix metropolitan market should be determined.
Concept Introduction: Plant location means to choice the particular region for setting up a business. Choosing a place for plant is most essential in order to get maximum profit. So it is very crucial to identify an ideal place, where all the capital is brought together for progress of business.
B
Interpretation: The new location for Oscar closes to his new facility should be determined.
Concept Introduction: Plant location means to choice the particular region for setting up a business. Choosing a place for plant is most essential in order to get maximum profit. So it is very crucial to identify an ideal place, where all the capital is brought together for progress of business.
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Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
- An operations manager wants to use factor rating method to decide the location of a new restaurant. Weights of the three factors specified, and the scores of two options are shown in the table below. Which option should the operations manager choose and what is the weighted score of this option? Factor Weight Option 1 Score Option 2 Score Proximity to the University 0.5 90 80 Rental Cost 0.3 80 100 Size 0.2 70 70 Option 2, weighted score = 84 Option 2, weighted score = 83 Option 1, weighted score = 83 There is no difference between the two options Option 1, weighted score = 84arrow_forwardPeter Billington Stereo, Inc., supplies car radios to auto manufacturers a nd is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Given the following costs: a) Perform an analysis of the volume over which each location is preferable.b) How does your answer change if Dallas's fixed costs increase by 10%?arrow_forwardFloorsRUs is considering new locations for its manufacturing plants. Costs for constructing a new facility in Huntsville are $1,100,000 and the company estimates that for every product from its new line, there would be an additional cost of $3. If the company were to locate in Hays, the new facility would cost $1,800,000 and each product would incur a $2 incremental cost. The company plans to sell the products to retailers for $7. At what volume is the point of indifference? At what forecasted volumes should FloorsRUs select Huntsville as their new manufacturing location and what volumes should the company select Hays and why?arrow_forward
- Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following data, which location would you recommend? Location Downtown Suburban Annual rent, including utilities Expected annual demand (sandwiches) Average variable costs per sandwich Average selling price per sandwich $12,000 30,000 $1.50 $3.25 $8,000 25,000 $1.00 $2.85arrow_forwardThe piece of land available is situated on the main road through the area and has great views of MountKinabalu on one side and the valley below on the other side. As the strategic advisor you have been asked to come up with a recommendation whether to develop a 4-star or 5-star property. Due to the fact that the area is near a World Heritage site and due to building height restrictions the total number of rooms for a 4-star hotel would be 300 rooms, whilst for a 5-star property the number of rooms would be 190. Identify at least THREE (3) strengths and weaknesses each and at least TWO (2) opportunities and threats each for the proposed hotel/resort at that area. (Not for Mount Kinabalu as a tourist attraction!)arrow_forwardDaniel Tracy, owner of Martin Manufacturing, must expand by building a new factory. The search for a location for this factory has been narrowed to four sites: A, B, C, or D. Thefollowing table shows the results thus far obtained by Tracy by using the factor-rating method to analyze the problem. The scale used for each factor scoring is I through 5. a) Which site should Tracy choose?b) If site D 's score for Energy costs increases from a 3 to a 5, do results change?c) If site A's Weather score is adj usted to a 4, what is the impact? What should Tracy do at this point?arrow_forward
- The Times-Picayune is searching for an ideal spotting station for the morning paper. The table below shows potential neighborhoods, their location on an XY grid of the city, and typical morning volume. What is the location that will minimize the transportation costs for the newspaper? Customer Annual Volume X-Coordinate Y-Coordinate Florida 255 6 4 Desire 150 7 6 Lafitte 235 2 4 Iberville 450 2 6 Guste 175 2 6 CJ Peete 255 1 4 Group of answer choices Near (3.0, 5.0) Near (2.8, 4.8) Near (2.5, 5.4) Near (2.8, 5.2)arrow_forwardThe Skulls, a student social organization, has two different locations underconsideration for constructing a new chapter house. Skull's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: Location Annual Fixed Variable Alpha Ave $5000 $200 per person Beta Blvd $8000 $150 per person If it is estimated that thirty persons will be living in this new chapter house, which location should the Skulls select?arrow_forwardWiebe Trucking, Inc., is planning a new warehouse to servethe western United States. Denver, Santa Fe, and Salt LakeCity are under consideration. For each location, annual fixedcosts (rent, equipment, and insurance) and average variablecosts per shipment (labor, transportation, and utilities) arelisted in the following table. Sales projections range from500,000 to 600,000 shipments per year. a. Plot the total cost curves for all the locations on a singlegraph.b. Which city provides the lowest overall costs?arrow_forward
- Dobb's Ltd Wants to choose the best location for its new aluminum plant. The manager ofproductions and operations has three possible locations to choose from. His assistantrecommends that he use break-even analysis location technique to help determine whichlocation is best based on costs. Assuming: Total fixed cost = 80,000 Price per unit= 20 AVC (Average variable cost) = 40 Break-even point= Total fixed cost / (AVC-Price per unit) Break-even point = 80,000/ (40-20) Break-even point = 4,000 1) Demonstrate to the OM manager using graph how to go about choosing the best location using thenumerical example designed above.arrow_forwardBalfour’s is considering building a plant in one of three possible locations. They have estimated the following parameters for each location: Location Fixed Cost Variable Cost Waco, Texas $300,000 $5.75 Tijuana, Mexico $800,000 $2.75 Fayetteville, Arkansas $100,000 $8.00 For what unit sales volume should they choose each location?arrow_forwardTexas Seasonings is considering three alternative locations for a new plant for producing its seasoning. Below are the associated fixed and variable costs. Assume the revenue is the same regardless of plant location. Which location will never be preferred, and why?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,