1. calculations required
management exercise and need an explanation and answer to help me learn.
For formulas, Please read the PPT Week 3 and Week 4 last 4 slides and finish the
assignment1. Instructions are available in word document.
Requirements: depends
Part A
Scenario:
Owners of a manufacturing company must expand. Searching for a location has been
narrowed to 4 sites: A, B, C or D. The following table shows the results. Use the factor
rating method to analyze the problem. Scale being used is 1 to 5.
Question 1:
Which location should they pick based on factor weight percentage? What might they do in
this case? Now calculate which location should they pick based on total weight? (Show all
work)
Question 2:
If site D’s score for energy costs increased from 3 to 5, does this change the results? (Show
all your work)
Question 3:
If site A’s score for weather increased from 2 to 4, does this change the results? What
should be done? (Show all your work)
Part B
Scenario:
Our facility uses 2500 of an item over a year. This item is purchased from a supplier 110
kms away. The following is known about the item
Holding cost of the item is: $1.50
Order cost: $18.75
Lead time is: 2 days
Working days per year is 250
Question 1:
Given the information above what would be the economic order quantity (EOQ)?
Question 2:
2. From part a, what would be the average inventory? What would be the annual inventory
holding costs?
Question 3:
From part a, how many orders would be made each year? What would be the annual order
cost?
Question 4:
What is the time between orders?
Question 5:
What is the simple reorder point (ROP)?
Part C
Scenario:
A grocery chain is deciding where to locate its new distribution centre. The new DC will
serve four grocery stores, each with a demand of 10,000 units.
The coordinates of the stores are:
(112,108)
(110,50)
(40, 85)
(10, 25)
Question 1:
Using the center of gravity formula calculate where should the DC be located? (Show all
your work)
Question 2:
Suppose now that each store instead had demand of 20,000 units. Where should the DC go
in this case? Explain why?