Mr. Smith, vice president for operations of HMC Inc., a manufacturer of computer compenents, is constrained...

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Mr. Smith, vice president for operations of HMC Inc., a manufacturer of computer compenents, is constrained from meeting the five year forecast by limited capacity at the existing two plants. These two plants are City A, and City B. You have been told that because of existing capacity constraints and the expanded market for the product, a new plant is to be added to the existing two plants. The real estate department has advise Mr. Smith two sites, City C and City D. Both cities are attractive in terms of labor supply, municipal services, and ease of factory financing. Table 3.1 & 3.2. present the transportation costs and output requirements for each of the two existing plants, demand at each of the three distribution centers, estimated transportation costs of the new proposed plants. Table 3.1. The demand and supply data Distribution Demand center X Y Z (Units) 55 000 65 000 80 000 Table 3.2.Shipping Costs Plant City A (existing plant) City B (existing plant) City C (proposed location) City D(proposed) Production plant Supply (Units) 60000 65000 A B Distribution center Y Z X 10 11 15 13 12 14 11 16 15 15 11 14 Adapted from Render B., Stair J. R. &Hanna M. E Which of the new locations will yield the lowest cost for the firm in combination with existing plants and distribution centers? Mr. Smith, vice president for operations of HMC Inc., a manufacturer of computer compenents, is constrained from meeting the five year forecast by limited capacity at the existing two plants. These two plants are City A, and City B. You have been told that because of existing capacity constraints and the expanded market for the product, a new plant is to be added to the existing two plants. The real estate department has advise Mr. Smith two sites, City C and City D. Both cities are attractive in terms of labor supply, municipal services, and ease of factory financing. Table 3.1 & 3.2. present the transportation costs and output requirements for each of the two existing plants, demand at each of the three distribution centers, estimated transportation costs of the new proposed plants. Table 3.1. The demand and supply data Distribution Demand center X Y Z (Units) 55 000 65 000 80 000 Table 3.2.Shipping Costs Plant City A (existing plant) City B (existing plant) City C (proposed location) City D(proposed) Production plant Supply (Units) 60000 65000 A B Distribution center Y Z X 10 11 15 13 12 14 11 16 15 15 11 14 Adapted from Render B., Stair J. R. &Hanna M. E Which of the new locations will yield the lowest cost for the firm in combination with existing plants and distribution centers?