Carn chps Po to toes B. BESTCHIP EXPANSION DECISIONS BestChip (BC) is a large na
ID: 456897 • Letter: C
Question
Carn chps Po to toes B. BESTCHIP EXPANSION DECISIONS BestChip (BC) is a large nationwide corporation that produces low-fat snack products for an expanding market. Basically, BC takes materials (corn, wheat, and potatoes) and turns them into two types of snacks: chips fregulat and green onion) and party mix (one variety). 8Cis expanding into the western United States and is considering sites for locating production facilities. BC currently has eight candidate sites. Table 1 shows the sites' purchase prices and the purchase and shipping cost per ton of each material to each site Table 1. Site Information and Material Shipping Cost Material Shipping Cost (S/Ton) Site Location Yuma, AZ Tucson, AZ Santa FE, NM Corn Wheat Potato 125,000 130,000 140,000 16 10 12 2 Fresno, CA -A Pomona, 150,000 170,000 155,000 Flagstaff, 13 14 12 15 7 Las Vegas, NV The purchase cost represents the yearly amortized cost of opening and operating the site (exclusive of shipping costs). Each site may produce as many as 20,000 tons of product per year BC has six major customers, and all demand is shipped by truck from the plant to the customer warehouse. The shipping cost depends on the tonnage and distance, and comes to $0.08 per ton mile. The customers, their location, and their yearly demand in tons for each product are listed in Table 2. You must meet demand Table 2. Demand Information Demand Regular Green Onion Party Mit Company t Jones 2 YZCO J Square Q Location Salt Lake City Albuquerque Phoenix San Diego Los Angeles 1,300 1,400 1,100 1,200 1,900 1,200 2,200 1,900 1,400 1,500 1,000 1,400 900 1,700 1,700 1,800 800 AJ Stores s Sun Quest 1,900 1400 2,300 Harm's Path Tucson The distance between locations are given in Table 3Explanation / Answer
a) Site analysis for the materials shipping cost
Corn would be cheapest in Santa NM, Tucson AZ, Yuma Az, Fresna CA, Pomona CA,
Wheat would be cheapest inTucson AZ, Yuma Az, Fresna CA, Pomona CA,
Potato would be cheapest in St . George UT, Las Vegas NV, Flag Staff AZ, Santa FE NM,
Site analysis for the Purchases cost:
St . George UT, Tucson AZ, Yuma Az, Fresna CA,
Analysis selected the location under low cost.
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Customer should be served by the nearest location to reducing transpotation cost
Company served according to their demand of the product
Regular Demand:
Company Names:::::::::::Demand::::::::::::::Cities Name
AJ San Diego ::::::::::::::::::1,900::::::::::::::::Pomona, Yuma, Los Vegas
Sun Quest, Los angels:::::::1,900:::::::::::::::Pomona, Fresno, Los Vegas
Harm's path, Tucson::::::::::::1,500:::::::::::::Tucson, Yuma, Flag Staff
YZCO, Albuquerque:::::::::::::1,400:::::::::::::Santa FE,Flag Staff,Tucson
Jones, Salt Lake City:::::::::::1,300::::::::::::St. George,Los Vegas,Flag Staff
Square Q Phoeniox, ::::::::::::1,200::::::::::::Tucson,Flag Staff, Yuma
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Green onion Demand
Company Names:::::::::::Demand::::::::::::::Cities Name
Sun Quest, Los angels:::::::::1,400:::::::::::::::Pomona, Fresno, Los Vegas
AJ San, Diego :::::::::::::::::::1,200::::::::::::::::Pomona, Yuma, Los Vegas
YZCO, Albuquerque:::::::::::::1,100:::::::::::::Santa FE,Flag Staff,Tucson
Harm's path, Tucson::::::::::::1,000:::::::::::::Tucson, Yuma, Flag Staff
Jones, Salt Lake City:::::::::::900::::::::::::::::St. George,Los Vegas,Flag Staff
Square Q Phoeniox, ::::::::::::800:::::::::::::::Tucson,Flag Staff, Yuma
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Party mix demand units little bit high, so one or two cities added
Company Names:::::::::::Demand::::::::::::::Cities Name
Sun Quest, Los angels:::::::::2,300:::::::::::::::Pomona, Fresno, Los Vegas, Yuma, St. George.
AJ San, Diego :::::::::::::::::::2,200::::::::::::::::Pomona, Yuma, Los Vegas,Fresno
Square Q Phoeniox, ::::::::::::1,800:::::::::::::::Tucson,Flag Staff, Yuma, Los Vegas,
Jones, Salt Lake City:::::::::::1,700::::::::::::::::St. George,Los Vegas,Flag Staff
YZCO, Albuquerque:::::::::::::1,700:::::::::::::Santa FE,Flag Staff,Tucson,Los Vegas,
Harm's path, Tucson::::::::::::1,400:::::::::::::Tucson, Yuma, Flag Staff,
Location were selected with nearest miles.
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b) My perfrom never be affected because i have used best cost reduction analysis,
if gasoline and frieght cost increased, never be affect.
Materials purchase and shipping cost taken at the base of low cost and cities were selected location to customer place also taken low miles.
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d) Yuma = lowest miles will be San Diego and Phoeniox which is having low miles than other locations with 170 and 185.
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c)
Company Names:::::::::::Demand::::::::::::::Cities Name
AJ San Diego ::::::::::::::::::1,900::::::::::::::::Pomona, Yuma,(111+170=281miles)
Sun Quest, Los angels:::::::1,900:::::::::::::::Pomona, Fresno(25+221=246 miles)
Harm's path, Tucson::::::::::::1,500:::::::::::::Tucson, Yuma, Flag Staff(10+240+260)=510miles
YZCO, Albuquerque:::::::::::::1,400:::::::::::::Santa FE,Flag Staff,(63+325=388 miles)
Jones, Salt Lake City:::::::::::1,300::::::::::::St. George,=317 miles
Square Q Phoeniox, ::::::::::::1,200::::::::::::Tucson,Flag Staff, Yuma(115+144+185=444 miles)