A small manufacturing facility is being planned

TELS 4341 Week 6 Chapter 15 & 16 Assignment

Problem 1: A small manufacturing facility is being planned that will feed parts to three heavy

manufacturing facilities. The locations of the current plants with their coordinates and volume

requirements are given in the following table:

Plant Location Coordinates (x, y) Volume (Parts per Year

Peoria 300, 320 4,000

Decatur 375, 470 6,000

Joliet 470, 180 3,000

a) Use the centroid method to determine a location for this new facility

Problem 2: Santa Cruz Bottling is a manufacturer of organic soft drinks on the coast of central

California. Its products are enjoying a growing reputation and increased demand throughout

the American Southwest. Because of the high cost of transporting soft drinks, it is considering a

new plant to serve the States of New Mexico and Arizona. A key concern in its search for a new

location is the resultant transportation costs to serve its key markets. Following is a list of cities

where its main wholesale customers are located, along with estimated annual demand in cases

of product for each.

City x-coordinate y-coordinate Number of cases

Phoenix 250 250 25,000

Tucson 350 125 20,000

Albuquerque 800 450 28,000

Santa Fe 850 520 17,000

a) Use the centroid method to recommend a location for the new bottling plant. Round

your coordinates to one decimal place.

b) Do you have any concerns about the result? How would you deal with them?

Problem 3: The McDonald’s fast-food restaurant on campus sells an average of 4,000 quarter-

pound hamburgers each week. Hamburger patties are resupplied twice a week and, on average,

the store has 350 pounds of hamburger in stock. Assume that the hamburger cost $1.00 a

pound. What is the inventory turnover for the hamburger patties? On average, how many days

of supply are on hand?

TELS 4341 Week 6 Chapter 15 & 16 Assignment

Problem 4: The owner of a large machine shop has just finished its financial analysis from the

prior fiscal year. Following is an excerpt from the financial report:

Net revenue $375,000

Cost of goods sold $322,000

Value of production materials on hand $42,500

Value of work-in-process inventory $37,000

Value of finished goods on hand $12,500

a) Compute the inventory turnover ratio (ITR)

b) Compute the weeks of supply (WS)