Q1 A firm is considering three alternative locations for setting up its new factory.

Each of
these locations provides some advantages and some limitations. Therefore, it is necessary that
some method of assessing the attractiveness of each site be arrived at. Based on a survey of
its top management, the company has identified seven factors that will determine the
appropriateness of a site for setting up the new factory. These factors and the score out of 100
for each of them are shown in table.
Score
Sl. No. Factor for consideration (out of 100)
1 Nearness to port 80
2 Existence of supplier infrastructure 70
3 Availability of skilled labour 90
Government policies and local
4 taxes 50
5 Projected cost of operations 60
6 Quality of road infrastructure 70
Availability of educational
7 infrastructure 40

The company collected some data pertaining to each site that it is considering, and based on
some criteria, was able to arrive at how each site rates against a score of 100 against each
factor. In some cases, actual data was estimated on the basis of some projections. Table has
details pertaining to these.
Sl. Site 1 Site 2 Site 3 Basis
No
. Factor for consideration
70 Km 130Km 95Km Actual
1 Nearness to port data
60 80 85 Score
Existence of supplier out of
2 infrastructure 100
50 70 85 Score
out of
3 Availability of skilled labour 100
70 45 60 Score
Government policies and local out of
4 taxes 100
20,000,00 18,000,000 17,000,00 Actual
5 Projected cost of operations (Rs) 0 0 data
80 90 70 Score
out of
6 Quality of road infrastructure 100
60 80 80 Score
Availability of educational out of
7 infrastructure 100
Identify the most appropriated site for locating the new factory on the basis of the above
information.
Q2 Consider question 2 of the previous document on Facility location. Assume that the
manufacturer came to know that there are constraints in locating the new facility. Based on an
initial survey of possible sites for the proposed facility, the manufacturer identified four
candidates ( numbered 1 to 4 ). What is the best location for the proposed new facility?
Existing Supply Points   Candidates for Proposed Facility
  Xi Yi Wi   Xi Yi
A 125 550 200 1 300 500
B 350 400 450 2 200 500
C 450 125 175 3 500 350
D 700 300 150 4 400 200

Q3 Matrix manufacturing is considering where to locate its warehouse in order to service its
four Ohio stores located in Cleveland, Cincinnati, Columbus and Dayton. Two sites are being
considered; Mansfield and Springfield, Ohio. Use the Load Distance model to make the
decision.
Candidates for Proposed
Existing Supply Points   Facility
  Xi Yi Wi   Xi Yi
Cleveland 11 22 15 Mansfield 11 14
Springfiel
Cincinnati 4 1 10 d 6 6.5
Columbus 10 7 12
Dayton 3 6 4

Q4 A Chain of store trading in a host of retail goods for urban customers is planning to set up
operations in one of the metropolitan cities in the country. The exact location for the new
outlet is to be decided. In order to do that, the company conducted a market survey and found
five pockets of consumption in the city. The distance coordinates of these five pockets from a
reference point in the grid map pertaining to the city are as follows: Zone 1(15,22), Zone
2(10,40),Zone 3(35,15), Zone 4(50,5) and Zone 5(40,35). The annual demand for the
goods(in tonnes) in the five zones is 200,130,80,170 and 120 respectively.
a) What is the centre of gravity for setting up the operation in the city?
b) If the cost of transporting the goods is Rs 300 per tonne, what is the cost implication
of locating stores at the centre of gravity