Table 1.1

2.1 From the Table 1.1 provided rate the four European cities under consideration and determine which one should be selected by Oliver Munday. (10 marks)

2.2 Of the three sites being considered by Rocko Mamas, A, B and C at which to build its latest state of the art caf. The goal is to locate at a minimum cost site, where cost is measured by the annual fixed plus variable costs of production. The fixed annualised costs per site are the following A: $10,000,000, B: $20,000,000 and C: $25,000,000. The variable cost per output produced are A: $2,500, B: $2,000 and C: $1,000. Rocko Mamas has estimated that it will serve between 0 and 60 000 clients in the new facility per year. For what values of volume if any would site C be recommended? In addition, what volume indicates site A is optimal? Lastly, over what range of volume is site B optimal? (10 marks)

2.3 Using relevant secondary data, examine the challenges that Rocko Mamas can be exposed to because of expanding to international markets. Make use of relevant examples. (20 marks)

2.4 Oliver Munday has developed the following supply, demand, cost and inventory data (provided below). He has requested you to allocate production capacity to meet demand at minimum cost using the transportation method. Determine the cost of the plan. Assuming the initial inventory has no holding cost in the first period and backorders are not permitted. Use the provided information to answer the questions.