4 You are the vice president of planning for Zingtronics, a small-scale manufacturer of IBMcompatible personal computers and peripherals based in Silicon Valley. Business is growing, and the company would like to open a second facility. Three options are being considered: (1) a second plant in Silicon Valley, (2) a new plant in Mexico as a Maquiladora, and (3) a new plant in Singapore. Most of the workforce will be low-skilled assembly and machine operators, but training in the use of computers and information systems will be required. It is also desirable to set up a small design group of engineers for new product and process development.

Of course, each option has its pros and cons. For example, Silicon Valley has a high-skill labor pool but is a very expensive place to do business. Singapore offers the same level of worker skills at lower cost but is distant from the market and headquarters. Mexico is the least expensive place to set up a business, as a result of favorable tax laws and cheap labor, but has a less educated workforce.

Develop two objective hierarchies, one for costs and one for benefits, that can be used to investigate the location problem. Use the AHP to rank the three alternatives on both hierarchies, and then compute the benefit/cost ratios of each. According to your analysis, which alternative is best?