1. Chapter 8 Location

   Use the following information to answer questions 1 5

   A company is looking to open a second factory to support Eastern Canada. They have identified 3 potential locations. The company expects to produce 75,000 units per year. They require your support to complete a cost analysis of their proposed locations.

   Location	Building Lease and Admin Cost (per month)	Variable Cost per Unit
   Brampton	$45,000	$7
   Sudbury	$35,000	$5
   Downtown Toronto	$60,000	$12

   What is the total Operating Cost for Brampton? (2 marks)

   		$1,065,000
   		$1,620,000
   		$570,000
   		$795,000

2 points

QUESTION 2

1. Which location should the company select purely based on cost structure? (2 marks)

   		Brampton
   		Sudbury
   		Downtown Toronto

2 points

QUESTION 3

1. The company is considering additional criteria for the locations and have partially filled out a factor analysis (below). Use this additional information to answer questions 3 - 5

   		Scores
   	Weighting	Brampton	Sudbury	Downtown Toronto
   Cost Structure
   Worker Availability	40%	80.00	60.00	50.00
   Proximity to Customers	45%	70.00	40.00	80.00

   Determine the weighting for the cost structure criteria. (2 marks)

2 points

QUESTION 4

1. What location would have the highest cost structure score based on the operating cost analysis you did in the previous questions (1-3)? (2 marks)

   		Brampton
   		Sudbury
   		Downtown Toronto

2 points

QUESTION 5

1. Based on the factor analysis, where should the company locate its new factory? (2 marks)

   		Brampton
   		Sudbury
   		Downtown Toronto