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12. Biogenics is a start-up company that plans to produce biological materials used in medical research. Major customers for their products will be the large
12. Biogenics is a start-up company that plans to produce biological materials used in medical research. Major customers for their products will be the large research hospitals located in major metropolitan areas. Customer location and projected annual sales are as follows. Products will be shipped UPS at a transport rate that averages $0.05/lb/mile. It is estimated that the annual operating costs (FOC) for a laboratory (plant) are given from FOC($)=($5,000,000N)/N, where N is the number of laboratories being operated. The vendors for the materials used in the production process are assumed concentrated at Chicago. The purchase weight is the same as the sales weight. The transport rate from Chicago to the laboratories is estimated at $0.02/lb/mile. Determine the number and location of the laboratories to serve Biogenics' potential markets. Which customers should be served out of each site? Every customer location is a potential laboratory site, except St. Louis, Portland, Kansas City, Washington, Detroit, and Chicago vendors. Suppose that we applied the " p-median" approach and figured that the best locations to open labs at would be the following based on " p," the desired numbers of labs. For each " p " value, you can assess a total cost based on: inbound transportation, outbound transportation, and FOC
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