Chapter 8 Internet Homework Problems
8.26 Katie Reynolds owns two exclusive women’s clothing stores in Miami. In her plan to expand to a
third location, she has narrowed her decision to three sites—one in a downtown office building, one in a
shopping mall, and one in an old Victorian house in the suburban area of Coral Gables. She feels that rent
is absolutely the most important factor to be considered, although walk-in traffic is 90% as important as
rent. Further, the more distant the new store is from her two existing stores, the better. She weights this
factor to be 80% as important as walk-in traffic. Katie developed the table below, in which she graded each
site from A to D, with A being best. Which site is preferable?
Downtown
Rent
D
Walk-in traffic
B
Distance from existing storesB
Shopping
Mall
Coral Gables
House
C
A
A
A
D
C
8.27 When placing a new medical clinic, county health offices wish to consider three sites. The pertinent
data are given in the table below. Which is the best site (assuming a higher weight is more desirable than a
lower one)?
Scores
Location Factor
Weight
Downtown
Facility utilization
9
Average time per emergency trip8
Employee preferences
5
Accessibility to major roadways 5
Land costs
4
Suburb A
9
6
2
8
2
Suburb B
7
6
5
4
9
6
8
6
5
6
8.28 A Detroit seafood restaurant is considering opening a second facility in the suburb of West
Bloomfield. The table below shows its ratings of five factors at each of four potential sites. Which site
should be selected?
Site
Factor
Weight
1
2
3
4
10
10
25
20
15
70
85
70
80
90
60
90
60
90
80
85
80
85
90
90
90
60
90
80
75
Affluence of local population
Construction and land cost
Traffic flow
Parking availability
Growth potential
Which site should be recommended?
8.29 The fixed and variable costs (in U.S. dollars) for the new recycling plant that Eldon Yi is opening in
Australia are computed as follows:
Cost
Fixed
Variable
Victoria
$1,000,000
$73/unit
Perth
$800,000
$112/unit
a) Over what range is each city preferable?
b) For a recycling of 5,000 units, which site is best?
1
8.30 The fixed and variable costs for four potential plant sites for a ski equipment manufacturer are shown
below:
Site
Atlanta
Burlington
Cleveland
Denver
Fixed Cost Per Year
Variable Cost Per Unit
$125,000
75,000
100,000
50,000
$6
5
4
12
a) Graph the total-cost lines for the four potential sites.
b) Over what range of annual volume is each location the preferable one (that with lowest
expected cost)?
c) If expected volume of the ski equipment is 5,000 units, which location would you
recommend?
8.31 Itron Health and Fitness has several production facilities scattered around the central and northern
part of Iowa. It would be desirable to have a distribution center from which to send product to retailers such
as Sears, WalMart, Kmart, and large sporting equipment retailers. Using the data in the following table,
calculate the center of gravity location for the proposed new facility.
City
A
B
C
D
E
F
G
H
Map Coordinates (x, y)
Truck Round-trips per Day
(2, 1)
(2, 13)
(4, 17)
(7, 7)
(8, 18)
(12, 16)
(17, 4)
(18, 18)
20
10
5
20
15
10
20
20
8.32 The main post office in Tampa, Florida, is due to be replaced with a much larger, more modern
facility that can handle the tremendous flow of mail that has followed the city’s growth since 1970. Since
all mail, incoming or outgoing, travels from the seven regional post offices in Tampa through the main post
office, its site selection can mean a big difference in overall delivery and movement efficiency. Using the
data in the following table, calculate the center of gravity location for the proposed new facility.
Regional
Post Office
Truck Round Trips
Map Coordinates (x, y) Per Day
Ybor City
Davis Island
Dale-Mabry
Palma Ceia
Bayshore
Temple Terrace
Hyde Park
(10, 5)
(3, 8)
(4, 7)
(15, 10)
(13, 3)
(1, 12)
(5, 5)
2
3
3
2
6
5
3
10
8.33 Prentice Hall Publishing is going to add two additional distribution centers to its European theater of
operations. One center will be located in each of two countries selected from the set of four
candidates. The four potential countries and 15 CSF ratings are given below. The CSFs were
evaluated on the basis of a 1 to 5 rating system, where 1 means least desirable country and 5,
the most desirable.
Candidate Country Ratings
Critical Success Factors
1. rate of technology change
2. innovations in process design
3. number of skilled workers
4. national literacy rate
5. stability of government
6. product liability laws
7. export restrictions
8. similarity in language
9. work ethic
10. tax rates
11. inflation
12. availability of raw materials
13. interest rates
14. population
15. number of miles of highway
Spain
England
Italy
Poland
1
3
1
2
5
1
4
1
4
1
5
5
4
1
1
3
5
5
5
1
2
2
3
2
3
3
5
5
3
5
5
5
3
2
1
1
1
1
5
5
5
5
2
4
5
2
4
5
3
1
2
5
2
2
2
2
5
4
1
1
On the assumption that each of the 15 CSFs is equally important, which two countries would
be the best choices for locating the two new distribution centers?
8.34 In Problem 8.33, if the first 5 CSF ratings are each given a mathematical weight of 0.1 and the
remaining 10 CSFs should be equally weighted at 0.05, what are the best two countries for the new
distribution centers?
3