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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)
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