Question
Cadbury Schweppes is considering where in town to house its central office (the office must also be located at an existing factory for cost reasons).
Cadbury Schweppes is considering where in town to house its central office (the office must also be located at an existing factory for cost reasons). If there are five factories in the district, with locations and size given in the following table, use the center-of-gravity method to determine at which factory the central office should be placed to minimize the average distance between the office and employees.
LOCATION | A | B | C | D | E |
(X,Y) | (5,5) | (0,5) | (0,0) | (5,0) | (2,1) |
SIZE(EMPLOYEES) | 2500 | 1000 | 10,000 | 4500 | 7500 |
3.2 Cadbury Schweppes is considering three expansion options. The first is to do nothing (Option A). The next is to leave the current plant open and also open a new larger plant (Option B). Finally, they could close the existing plant and open the new, larger one (Option C). Given the variable costs (VC) and fixed costs (FC) from the table below, calculate the range for which each option minimizes cost.
OPTION | FC(R) | VC (R /UNIT) |
A | 50,000 | 2 |
B | 100,000 | 1 |
C | 60,000 | 1,4 |
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