EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 6, Problem 5PA
Summary Introduction
Interpretation: The X and Y coordinate of a facility needs to be determined based on given information using Centre of Gravity method.
Concept Introduction: The Center of Gravity method is useful in determining suitable facility locations by keeping in mind the market demand and transportation costs.
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Students have asked these similar questions
An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow.
Location
Fixed Cost
Variable Cost
A
$100,000
$10
B
$150,000
$7
C
$200,000
$5
Plot the total cost curves in the chart provided above and identify the range over which each location would be best.
Use break-even analysis to calculate exactly the break-even quantity that defines each range.
A location analysis has been narrowed down to two locations, A and B. The main factors in the decision will be supply of raw materials, which has a weight of .50, transportation cost, which has a weight of 0.4, and labour cost, which has a weight of .10. The ratings for raw materials, transportation, and labour are for A-60, 80, and 70, respectively; for B-70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:
options:
choose location B
none of the choices
reject both locations
choose location A
be indifferent between these locations
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