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Facility Location.pdf - Class Exercises for Week 5(Facility...

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1 Class Exercises for Week 5 (Facility Location) Question 1 A company that has recently experienced growth is seeking to lease a small plant in Winnipeg, Montreal, or Toronto. Prepare an economic analysis of the three locations given the following information: annual cost for building, equipment, and administration would be $40,000 for Winnipeg, $60,000 for Montreal, and $100,000 for Toronto. Labour and materials are expected to be $8 per unit in Toronto, $4 per unit in Winnipeg, and $5 per unit in Montreal. The Montreal location would increase total transportation cost by $50,000 per year, the Winnipeg location by $60,000 per year, and the Toronto location by $25,000 per year. Expected annual quantity is 10,000 units. Question 2 Using the following factor ratings (100 points is the maximum), determine which location for a clothing store, A, B, or C, should be chosen. LOCATION Factor (100 points each) Weight A B C Convenience of access 0.15 80 70 60 Parking facilities 0.20 72 76 92 Frontage 0.18 88 90 90 Shopper traffic 0.27
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