Ashley’s Auto Top Carriers currently maintains plants in Atlanta and Tulsa that supply major distribution centers in Los Angeles and New York. Because of an expanding demand, Ashley has decided to open a third plant and has narrowed the choice to one of two cities-New Orleans or Houston. The pertinent production and distribution costs, as well as the plant capacities and distribution demands, are shown in the table. from/to LA NY NORMAL PRODUCTION UNIT PRODUCTION ATLANTA 8 5 600 6 TULSA 4 7 900 5 NEW ORLEANS 5 6 500 4 ANTICIPATED HOUSTON 4 6 500 3 ANTICIPATED FORECAST DEMAND 800 1200 2000

MARKETING 2018
19th Edition
ISBN:9780357033753
Author:Pride
Publisher:Pride
Chapter15: Retailing, Direct Marketing, And Wholesaling
Section15.1: L.l.bean: Open 24/7, Click Or Brick
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Ashley’s Auto Top Carriers currently maintains plants in Atlanta and Tulsa that supply major distribution centers in Los Angeles and New York. Because of an expanding demand, Ashley has decided to open a third plant and has narrowed the choice to one of two cities-New Orleans or Houston. The pertinent production and distribution costs, as well as the plant capacities and distribution demands, are shown in the table.

from/to

LA

NY

NORMAL PRODUCTION

UNIT PRODUCTION

   

ATLANTA

8

5

600

6

   

TULSA

4

7

900

5

   

NEW ORLEANS

5

6

500

4

ANTICIPATED

HOUSTON

4

6

500

3

ANTICIPATED

FORECAST DEMAND

800

1200

2000

     

Which of the new possible plants should be opened?

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