You are a supply chain expert hired by Tru-Blade to help its managers make this location decision. For the alternative plant locations, determine the shipping patterns that will minimize total transportation costs. Where should the new plant be located? Why?

The Tru-Blade Ski Company makes downhill skis and snowboards for recreational winter sport enthusiasts. Business has been growing rapidly, and the firm has outgrown its single factory location, in Pocatello, Idaho. Tru- Blade has warehouses in five locations: Burlington, Vermont; Eureka, California; Denver, Colorado; Philadelphia, Pennsylvania; and Montreal, Canada. Managers have forecast that a new production plant with a capacity of 10,000 units per month will soon be needed, and they have decided to consider where such a plant should be located. They have narrowed their list to two possible locations€”Portland, Oregon, and Cleveland, Ohio€”and have identified empty factory buildings that would require minimal conversion costs. The following two tables give the capacities, forecasted demand, and shipping costs associated with these options.

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Capacity Demand (skis per month) 6,000 3,500 8,000 1,500 3,000 22,000 (skis permonth) 12,000 10,000 Warehouse Plant Pocatello Burlington Eureka New Plant Denver Philadelphia Montreal Total Total 22,000 Shipping Cost to Warehouse (per pair of skis) Burington $8.00 Eureka Denver Philadelphia $7.00 Plant Montreal Pocatello $3.00 $6.000 $4.00 $5.00 Portland (option 1) Cleveland (option 2) $10.00 $3.00 $8.00 $7.00 $8.00 $5.00 $4.00 $6.00 $3.00