QUESTION $3$

a$.$

A single facility is needed to meet the demands of four markets. The locations and demands of

these four markets are shown below.

Market Coordinates Demand

A $(8,6)10$

B $(4,12)15$

C $(3,2)10$

D $(9,6)6$

i$.$ Using the data in Table $13\mathrm{.}2,$ identify an optimal location for the new facility.

$[8$ marks$]$

b$.$

An operations manager has narrowed down the search for a new King Kola plant to three

locations. Fixed and variable costs follow.

Location Fixed Cost Variable Cost

A $$100,000$ $$10$

B $$150,000$ $$7$

C $$200,000$ $$5$

i$.$ Plot the total cost curves in the chart provided above and identify the range over

which each location would be best. $[7$ marks$]$

ii$.$ Use break$-$even analysis to calculate exactly the break$-$even quantity that defines each

range. $[3$ marks$]$

c$.$

A manufacturing firm is considering three potential locations for a new parts manufacturing facility. A

consulting firm has assessed three sites based on the four factors supplied by management as critical to

the location's success. Management$-$supplied the factor weights and the consultant team scores as seen

MGMT$2026$ Production and Operations Management Semester II $2023-2024$

in the table below. Scores are based on $50=$ best.

Location

Factor Weight A B C

Labor Climate $10354520$

Taxes $30304040$

Utilities $20252045$

Wages $40102525$

i$.$ Which location should be selected and why? $[7$ marks$]$