Operations Management/Inventory

Assignment 6
1. Plant A is located at the (X, Y) coordinates of (100, 200) and has a volume of shipping of 500
units a day. Plant B is located at the (X, Y) coordinates of (150, 400) and has a volume of
shipping of 200 units a day. Using the centroid method, what is the X coordinate for the new
plant location?
2. A clothing chain is considering two different locations for a new retail outlet- Barclay and
Chester. They have identified the four factors listed in the following table as the basis for
evaluation, and have assigned weights as shown on the left. The manager has rated each
location on each factor, on a 100-point basis, as shown in the second table below.
Factor Factor Description Weight
1 Average community income .40
2 Community growth potential .25
3
Availability of public
transportation .15
4 Labor cost .20
Barclay Chester
30 20
40 30
20 20
10 30
What is the score for Chester?
3. The owner of a millwork shop is considering three alternative locations for a new plant for
building embossed-and-clad steel exterior doors for residences. Fixed and variable costs follow.
Since the plant ships nationwide, revenue is assumed the same regardless of plant location. Plot
the total cost lines in the chart provided below, and identify the range over which each location is best.
Location
Costs A B C
Fixed $700,000 $1,000,000 $1,1000,000
Variable $28 $18 $20
Which location is the cheapest?

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