Question: A firm is considering 3 alternative locations for setting up a new factory. Each of these locations provide some advantages and some limitations, therefore it
A firm is considering 3 alternative locations for setting up a new factory. Each of these locations provide some advantages and some limitations, therefore it is necessary that some methods of assessing the attractiveness of each site be arrived at. Based on the survey of top management the company has identified seven factors that will determine the appropriateness of a site for setting up the new factory. These factors and the score out of 100 for each of them are shown in the table below
Sl. No.
Factor for consideration
Score
(out of 100)
1
Nearness to port
80
2
Existence of supplier infrastructure
70
3
Availability of skilled labour
90
4
Government policies and local taxes
50
5
Projected cost of operations
60
6
Quality of road infrastructure
70
7
Availability of educational infrastructure
40
The company collected some data pertaining to each site that is considering and based on some criteria was available to arrive at how each site rates against the score of 100 against each factor. In some cases, actual data was estimated on the basis of projections. Table has data detailed pertaining to these
Sl. No.
Factor for consideration
Site 1
Site 2
Site 3
Basis
1
Nearness to port
70 Kms
130 Kms
95 Kms
Actual Data
2
Existence of supplier infrastructure
60
80
85
Score out of 100
3
Availability of skilled labour
50
70
85
Score out of 100
4
Government policies and local taxes
70
45
60
Score out of 100
5
Projected cost of operations
Rs. 20000000
Rs. 18000000
Rs.
17000000
Actual Data
6
Quality of road infrastructure
80
90
70
Score out of 100
7
Availability of educational infrastructure
60
80
80
Score out of 100
Identify the most appropriate site for locating the new factory on the basis of above information
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