Background $($This case was taken from an article that appears in The Economist Nov. $2020)$Barilla Pasta is the largest pasta maker in the world. The organization has a modern high$-$tech facility located at its world headquarters in Parma, Italy. Barilla exports $60\%$ of its products; mainly to Europe and the U$.$S$.$ Because of the COVID pandemic, people around the world are staying home and cooking for themselves. As a result, pasta sales world wide have increased. Likewise, pasta sales for Barilla have increased around $30\%$ from $2019$ to $2020.$ One of Barillas most important markets is Germany. Since March of $2020,$ Barilla has supplied $22\%$ of the pasta and $39\%$ of the pasta sauces and pestos eaten in Germany $($The Economist, Nov. $2020).$ Global sales for Barilla were $$4\mathrm{.}2$ billion for $2019.$ ConsiderationsBecause of the international growth in pasta sales, Barilla decides to set up a pasta and sauce facility in the U$.$S$.$ You are the lead operations management expert and you head a team responsible for selecting a plant location for one of Barillas North American operations. Here are some of the factors to be considered in making your decision. By no means is this everything, just some of what that should be considered. $1.$ Barilla has a total demand per ton shipment of $$22,982$ per day, and revenue $($sales$)$ per ton shipment for pasta $($X $1)$ is $$11,497.$ The revenue per ton shipment for the pasta sauce and pesto $($X $2)$ is $$11,485.$ Also, the production capacity that Barilla has available is $25$ tons per hour. It takes $20$ tons of capacity to produce pasta and $4\mathrm{.}58$ tons of capacity to produce the pasta sauces. $2.$ This particular Barilla facility will make home$-$made pasta. To produce approximately one ton of home$-$made pasta and sauce requires the following: $2000$ pounds of flour $74$ pounds of eggs $(666$ eggs$)2\mathrm{.}6$ gallons of water $21$ pounds of salt $\mathrm{.}03$ flour to pasta conversion loss For sauce: $1812\mathrm{.}5$ pounds of canned tomatoes $($per ton of sauce$)187$ gallons of water $($approximately$)3.$ Final products are shipped in cases $(24$ items to a case$),$ here are some market the concerns: Each jar of sauce weighs $16$ oz$.($shipped in glass jars$)$ Each package of pasta weight $1$ pound $($paperboard cartons$)$ Barilla ships $500$ cases of pasta at a time Barilla ships $166$ cases of sauce at a time $4.$ Here are the dimensions and costs of the transport vehicles for the U$.$S$.$ Truck $($standard$)$: $48$ ft$.$ long; $8\mathrm{.}2$ ft$.$ wide; $8$ ft$.$ Height Rail $($train$)$: $507$ L; $96$ W; $1011$ H Truck rates: $$2\mathrm{.}30-$$$2\mathrm{.}86/$ ton mile $($average rate: $$2\mathrm{.}58/$ ton mi$.)$ Rail rates: $\mathrm{.}105$ cheaper than trucking rates $/$ ton mile Distance: $200$ miles Please note that the higher freight rates are associated with final products Problems$1.$ Calculate all transportation costs to ship by truck$2.$ Calculate all transportation costs to ship by rail $($train$)3.$ Where should Bariila locate its North American $($NA$)$ facility given shipment by truck?$4.$ Where should Barilla locate its NA facility given shipment by railroad?$5.$ What mode of transportation should Barilla choose and why?