Ops Mgmt 8e ch08pp - Practice Problems Chapter 8 Location...

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Practice Problems: Chapter 8, Location Strategies Problem 1 : A major drug store chain wishes to build a new warehouse to serve the whole Midwest. At the moment, it is looking at three possible locations. The factors, weights, and ratings being considered are given below: Ratings Factor Weights Peoria Des Moines Chicago Nearness to markets 20 4 7 5 Labor cost 5 8 8 4 Taxes 15 8 9 7 Nearness to suppliers 10 10 6 10 Which city should they choose? Problem 2 : Balfour’s is considering building a plant in one of three possible locations. They have estimated the following parameters for each location: Location Fixed Cost Variable Cost Waco, Texas $300,000 $5.75 Tijuana, Mexico $800,000 $2.75 Fayetteville, Arkansas $100,000 $8.00 For what unit sales volume should they choose each location? Problem 3 : 1
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Our main distribution center in Phoenix, AZ is due to be replaced with a much larger, more modern facility that can handle the tremendous needs that have developed with the city’s growth. Fresh produce travels to the seven store locations several times a day making site selection critical for efficient distribution. Using the data in the following table, determine the map coordinates for the proposed new distribution center. Store Locations Map Coordinates (x,y) Truck Round Trips per Day Mesa (10,5) 3 Glendale (3,8) 3 Camelback (4,7) 2 Scottsdale (15,10) 6 Apache Junction (13,3) 5 Sun City (1,12) 3 Pima (5,5) 10 2
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Problem 4 : The following table gives the map coordinates and the shipping loads for a set of cities that we wish to connect though a central “hub.” Near what map coordinates should the hub be located?
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