Principles Of Operations Management
11th Edition
ISBN: 9780135173930
Author: RENDER, Barry, HEIZER, Jay, Munson, Chuck
Publisher: Pearson,
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Question
Chapter 8, Problem 3CS
Summary Introduction
Case summary:
The top management of Company SRVC in City L announced its plan of relocation of its manufacturing and assembly unit to City M in October 2018. As a major producer of pickup campers and camper trailers, the firm experienced declining profits for 5 consecutive years. The cost of raw materials, labor, utility costs, taxes, and transportation expenses increase the production cost.
The firm considered several geographical areas for its relocation. The prime reason for relocation is to minimize transportation costs, tax structures, labor costs, and other financial inducements. Out of many options, the firm considered City M as the most favorable location for relocation.
Before two weeks of announcement of relocation, the firm chose R industrial park and began recruiting through state employment office and arrangement to sell or lease the property at City L was initiated. R industrial park offered 5 advantages to Company SRVC in its relocation. Other factors like reduced labor cost, decreased utility cost, tax exemption also added weight for relocation.
To evaluate: The reasons stated by Person GOB for relocation.
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Explain the types of risks in terms of their location?
•• 8.15
A British hospital chain wishes to make its first
entry into the U.S. market by building a medical facility in the
Midwest, a region with which its director, Doug Moodie, is
comfortable because he got his medical degree at Northwestern
University. After a preliminary analysis, four cities are chosen for
further consideration. They are rated and weighted according to
the factors shown below:
CITY
FACTOR
WEIGHT CHICAGO MILWAUKEE MADISON DETROIT
Costs
2.0
8.
5
7.
Need for a facility
1.5
9.
8.
Staff availability
1.0
7
7
Local incentives
0.5
8.
6.
a) Which city should Moodie select?
b) Assume a minimum score of 5 is now required for all factors.
Which city should be chosen? PX
4.
66
••8.23
Todd's Direct, a major TV sales chain headquar-
tered in New Orleans, is about to open its first outlet in Mobile,
Alabama, and wants to select a site that will place the new out-
let in the center of Mobile's population base. Todd examines the
seven census tracts in Mobile, plots the coordinates of the center
of each from a map, and looks up the population base in each
to use as a weighting. The information gathered appears in the
following table.
POPULATION IN
CENSUS TRACT
X, Y MAP
COORDINATES
CENSUS TRACT
101
2,000
(25, 45)
102
5,000
(25, 25)
103
10,000
(55, 45)
104
7,000
(50, 20)
105
10,000
(80, 50)
106
20,000
(70, 20)
107
14,000
(90, 25)
a) At what center-of-gravity coordinates should the new store be
located?
b) Census tracts 103 and 105 are each projected to grow by
20% in the next year. How will this influence the new store's
coordinates? P
Chapter 8 Solutions
Principles Of Operations Management
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