EBK PRINCIPLES OF OPERATIONS MANAGEMENT
11th Edition
ISBN: 9780135175859
Author: Munson
Publisher: VST
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Chapter 8, Problem 2P
Summary Introduction
To Find: considering both labor and transportation costs, which is the most favorable location.
Introduction: Location is one of the important element for a business that controls the cost and expenses. Location strategies support in framing other strategies for a firm where optimal location point will provide competitive advantage to a firm.
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Shipping cost from Myanmarto Denver, Colorado, the final destination, is $1.50 per unit.
Shipping cost from China to Denver is $1 per unit, while the ship-ping cost from Billings to Denver is $.25 per unit. Considering
both labor and transportation costs, which is the most favorableproduction location?
Refer to Problem 8.1. Shipping cost from Myanmar to Denver, Colorado, the final destination, is $1.50 per unit. Shipping cost from China to Denver is $1 per unit, while the shipping cost from Billings to Denver is $.25 per unit. Considering both labor and transportation costs, which is the most favorableproduction location?
GEW is an electronics component manufacturer that has been located in Bahamas since 1991, supplying originalequipment manufacturers (OEMs) with quality components. In the past several years, GEW has experienced increasingpressure from other manufacturers located in other countries. In Bahamas, while labor remains quite inexpensive, there hasbeen a relatively steady increase in labor costs. In addition, utility costs most notably water and energy costs have led thefirm to contemplate moving operations elsewhere in Asia and Africa to make the firm more competitive. GEW remainsprofitable, but margins have shrunk, and management is interested in ensuring that the firm remains competitive againstother component manufacturers in the medium term to long term.A senior management team has formed a committee to reach a decision regarding possible relocation. The committee hasidentified two additional locations as possible candidates for relocation: Hong Kong (People’s Republic of China [PRC])…
Chapter 8 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
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