6. A company, which produces specialty fabrics or military uniforms, has plants

Question

6. A company, which produces specialty fabrics or military uniforms, has plants in Syracuse and Philadelphia, will add a third such plant in either Athens, Baltimore, or Chapel Hill. The Company has collected the following economic and non economic data.

The factor-rating scheme used by the company is the following: For each site, the cost score is the ratio of minimum weekly cost to actual weekly cost, times 100. The weights are: cost, 0.35; finishing material supply, 0.20; maintenance facilities, 0.15; and community attitude, 0.30.

Which location is best?

Explanation / Answer

Weights :

Cost = 0.35 , Finishing Material Supply = 0.20 , maintenance facilities = 0.15 , communal attitude = 0.30

Total Cost = Transportation Cost/week + Labor Cost/week

Score = weights for the factore * cost of that factor

Applying the above we get :

We see that Athens has the highest score of 724 , therefore Athens is the best location to open up the third plant.

Athens Baltimore Chapel Hill Factors Weights Cost($) Score Cost($) Score Cost($) Score Economin Factors Transportation Cost/week 780 640 560 Labor Cost/week 1200 1020 1180 Total Cost 0.35 1980 693 1660 581 1740 609 Non Economic factors Finishing Material Supply 0.2 35 7 85 17 70 14 Maintenance facilities 0.15 60 9 25 3.75 30 4.5 Community attitude 0.3 50 15 85 25.5 70 21 Total Score 724 627.25 648.5

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