Page 157 - DMGT501_OPERATIONS_MANAGEMENT

Unit 5: Facility Location

operate at 80 per cent efficiency what is the most economic location on the basis of actual Notes
output.
18. Mr. satish is a manufacturer of IT farm . He is considering three location (A, B and C) for a
new plant. Cost per year at the sites are 9,40,000, 3,80,000 and 5,72,000 respectively.
Whereas variable costs are 100 per unit, 90 per unit and 95 per unit respectively. If the
plant is designed to have an effective system capacity of 2500 units per year and is expected
to operate at 90 per cent efficiency what is the most economic location on the basis of
actual output.
19. The Indian Seamless glass Company Ltd. which has distribution plants in Up and HP is
considering adding a third assembly and distribution plant either in Delhi, Gurgoan or
noida. The company has collected the following economic and other relevant data:

Factor Delhi Gurgoan noida
Transportation cost /week 790 890 934
Selected criteria scores(based on 45 34 65
scale 0-100 points)
Labour cost 1900 2300 1800
Community attitudes 67 80 70
Maintenance facilities 60 68 35

Company Management has pre-established weights for various factors ranging from
0-10. They include a standard of 1.00 for each 10 per week of economic advantage. Other
weights that are applicable are 1.5 on finishing material supply, 0.8 on maintenance facilities
and 2.0 on community attitude. Maintenance also has a minimum acceptable score of 30.
Develop a quantitative factor comparison for the three locations.

20. Mr. neerat Mathur is a manufacturer of farm equipment . He is considering three location
(A, B and C) for a new plant. Cost per year at the sites are 3,40,000, 2,80,000 and 2,72,000
respectively. Whereas variable costs are 100 per unit, 90 per unit and 95 per unit
respectively. If the plant is designed to have an effective system capacity of 2500 units per
year and is expected to operate at 80 per cent efficiency what is the most economic location
on the basis of actual output.

Answers: Self Assessment

1. False 2. False

3. True 4. False
5. True 6. True
7. True 8. True

9. True 10. False
11. Work ethics of labor; labor problems 12. Customers; suppliers
13. Industry 14. 0, 1; 0, 100
15. More

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