Solution of Chapter 8 Operations Mangement by Jay Heizer

Service location decisions tend to focus on the revenue function, whereas manufacturing/industrial location decisions tend to focus on costs. The serve sector uses techniques such as Correlation analysis Traffic counts Demographic analysis Purchasing power analysis The industrial decision uses Transportation mode Factor-weighting approach Break-even analysis Cross everyplace charts 8. Factors to consider when choosing a country Exchange rates Government stability Communications systems within the country and to the home right Wage rates Productivity Transportation costsLanguage Tariffs Taxes Attitude towards foreign investors/incentives Legal system Ethical standards Cultural issues Supplies availability Market locations 9. Factors to consider in a region/community decision Corporate desires Attractiveness of region Labor issue Utilities Environmental regulations Incentives Proximity to raw materials/customers Land/construction costs 10. land site location reckons Size and cost Transportation systems Zoning Proximity of services/supplies needed Environmental impact END-OF-CHAPTER PROBLEMS 8. 1(a)Six laborers each making $3 per day earth-closet produce 40 units. b)Eight laborers each making $2. 50 per day, can produce 45 units. (c)Two laborers, each making $64 per day, can make degree centigrade units.China is closely economical, assuming transportation costs are not included. 8. 2Malaysia China Montana China is most favorable. 8. 6Atlanta Charlotte Charlotte is better. 8. 7 Suburb B has the highest rating, but weights should be examined employ sensitivity analysis, as the final ratings are all close. 8. 8 status Present Location Newbury Hyde Park Factor Wgt Wgt Wgt 1 40 0. 30 12 60 0. 30 18. 00 50 0. 0 15. 0 2 20 0. 15 3 20 0. 15 3. 00 80 0. 15 12. 0 3 30 0. 20 6 60 0. 20 12. 00 50 0. 20 10. 0 4 80 0. 35 28 50 0. 35 17. 50 50 0. 35 17. 5 Total Points 49 Total Points 50. 50 Total Points 54. 5 It appears that Hyde Park represents the c rush alternative. 8. 9(a)Chicago = 16 + 6 + 7 + 4 = 33 Milwaukee = 10 + 13. 5 + 6 + 3 = 32. 5 Madison = 12 + 12 + 4 + 2. 5 = 30. 5 Detroit = 14 + 6 + 7 + 4. 5 = 31. 5 All four are quite close, with Chicago and Milwaukee almost tied.Chicago has the largest rating, with a 33. b)With a cutoff of 5, Chicago is unacceptable because it scores solo 4 on the second factor. Only Milwaukee has scores of 5 or higher on all factors. 8. 10 Location A Factor lean Rating Weighted Score 1 5 100 500 2 3 80 240 3 4 30 120 4 2 10 20 5 2 90 180 6 3 50 150 Total charge score 1210 Location B Factor Weight Rating Weighted Score 1 5 80 400 2 3 70 210 3 4 60 240 4 2 80 160 5 2 60 120 6 3 60 180 Total weighted score 1310 Location C Factor Weight Rating Weighted Score 1 5 80 400 2 3 100 300 3 4 70 280 4 2 60 120 5 2 80 160 6 3 90 270 Total weighted score 1530Based on the total weighted scores, Location C should be recommended. Note that raw weights were used in reckon these wei ghted scores (we just multiplied weight times rating). Relative weights could have been used instead by taking each factor weight and dividing by the sum of the weights (i. e. , 19). Then the weight for factor 1 would have been . Location C would still have been selected. . 11 Site 3 has the highest rating factor, 86. 65, and should be selected. 8. 12(a)The following figure indicates the volume range for which each site is optimal. Site 1 is optimal for production less than or bear upon to 125 units. Site 2 is optimal for production between 125 and 233 units. Site 3 is optimal for production above 233 units. (b)For 200 units, site 2 is optimal. 8. 13 (a) (b)For 5,000 units, Perth is the better option. 8. 14 VA AB BC 8. 15 (a) The total cost equations are (b)Denver is preferable over the range from 03,570 units.Burlington is lowest cost at any volume exceeding 3,570, but less than 25,000 units. Atlanta is never lowest in cost. Cleveland becomes the best site only when volume exc eeds 25,000 units per year. (c)At a volume of 5,000 units, Burlington is the least-cost site. 8. 16 The proposed new hub should be near (5. 15, 7. 31). 8. 17 City Map Coordinates Shipping Load A 2, 1 20 B 2, 13 10 C 4, 17 5 D 7, 7 20 E 8, 18 15 F 12, 16 10 G 17, 4 20 H 18, 18 20 120 8. 19 The proposed new facility should be near (7. 97, 6. 69).