MBAD 5420 PRODUCTION MANAGEMENT

HOMEWORK ASSIGNMENT #4

Due date: 27/02/2022

In September 2010, Suresh Krishna, the VP of operations at Polaris Industries Inc., a manufacturer of ATVs, side-by-sidesand snowmobiles, sat in his office in Medina, Minnesota, deliberating the recommendation he was developing for a distribution center (DC).

There are 10 candidate locations that are selected for constructing a new DC. Each of these locations will be able to serve only some of the 10 biggest stores, whose demand is aimed to be replenished within 24-hours. The replenishment opportunity of each DC-store pair is shown by the binary values 0-1 on the Excel Exhibit (Sheet DC Selection). The management has estimated the total cost of opening each DC as shown on the row DC costs. The aim is to open as few DCs as possible with the minimum amount of total costs such that all stores can be served. Which DCs should be opened and what will be the total cost?

As a next step, suppose that Mr. Krishna needs to come up with the layout decision of the new factory. There are 4 main departments of equivalent size, namely the design office, steel shop, paint shop and sub-assembly area. The importance of their closeness to each other is given in the Relationship chart in the Layout Sheet of the Excel file. There are 4 candidate locations for these shops with the following distance matrix with respect to each other:

	Distance (in 100 m's)
	1	2	3	4
1	-	10	15	20
2	10	-	10	20
3	15	10	-	15
4	20	20	15	-

Starting an any initial solution you prefer and using PEM (pairwise exchange method), find the best solution to locate each department in each one of the locations 1, 2, 3 and 4 to maximize the efficiency according to the Relationship matrix.