Submitted by: Submitted by nehalnahyan
Views: 406
Words: 1107
Pages: 5
Category: Business and Industry
Date Submitted: 12/10/2011 08:25 AM
Assignment no: 4
Group Name: Know Thyself
Topic: Facilities Location
Prepared for
Sayeedul Karim
Course Instructor
Operations Management
BRAC University
Group Members
Name | ID |
Kowser Bakhtiar | 10164019 |
Manik Mohammad Nandan | 10164052 |
Ziaul Alam | 10164018 |
Md. Al Mamun | 10164010 |
Sonia Islam | 11364014 |
Submission Date: 7 December, 2011
Problem no 1
| | | Variable Cost to Save Customers($) | |
| Potential Location | Fixed Cost ($) | 1 | 2 | 3 | 4 | 5 |
A | Alabama | 45000 | 40 | 90 | 40 | 90 | 60 |
B | Boston | 45000 | 30 | 50 | 20 | 60 | 40 |
C | California | 55000 | 60 | 40 | 50 | 30 | 70 |
D | Detroit | 40000 | 20 | 80 | 30 | 40 | 90 |
Demand (units) | | 1000 | 1000 | 1000 | 1000 | 1000 |
Drop HeuristicStart with all warehouse open |
Step 1 | | | | | |
| | | FC | VC | TC |
ABCD | | | 185000 | 150000 | 335000 |
| | | | | |
From | Drop | Leaves | FC | VC | TC |
ABCD | A | BCD | 140000 | 150000 | 290000 |
ABCD | B | ACD | 140000 | 180000 | 320000 |
ABCD | C | ABD | 145000 | 170000 | 315000 |
ABCD | D | ABC | 145000 | 160000 | 305000 |
| | | | | |
Step 2 | | | | | |
From | Drop | Leaves | FC | VC | TC |
BCD | B | CD | 95000 | 190000 | 285000 |
BCD | C | BD | 85000 | 170000 | 255000 |
BCD | D | BC | 100000 | 160000 | 260000 |
| | | | | |
Step 3 | | | | | |
From | Drop | Leaves | FC | VC | TC |
BD | B | D | 40000 | 260000 | 300000 |
BD | D | B | 45000 | 200000 | 245000 |
Findings: The lowest cost solution by using DROP Heuristic is open to B for a total cost of $245000.
Recommendation: Mega- Clean should open facility only in Boston to operate their business with minimum cost.
Limitations: This recommendation is based on only DROP Method without considering ADD method. So, it may be a good solution but not the best one. Moreover, capacity of the facility is not consider in this recommendation.
Note: FC = Fixed cost;...