A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering
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A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering department was asked to identify the various alternatives together with the costs to relocate the plant, and the benefits. The engineers examined six likely sites, together with the do-nothing alternative of keeping the plant at its present location. Their findings are summarized as follows:
The annual benefits are expected to be constant over the 8-year analysis period. IT the firm uses 10% annual interest in its economic analysis, where should the manufacturing plant be located?
Transcribed Image Text:
First Uniform Annual Benefit (S000s) Cost (S000s) Plant Location $ 52 $300 Denver Dallas 550 137 450 San Antonio 117 Los Angeles 750 167 Cleveland 150 18 Atlanta 200 49 Chicago
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