Question
explain step by step procedure for this' An electronics manufacturer wants to expand its market in Europe. The demand in Europe is forecasted as: England
explain step by step procedure for this'
An electronics manufacturer wants to expand its market in Europe. The demand in Europe is forecasted as:
England | France | Spain | Germany | Italy | Sweden |
24 | 32 | 28 | 19 | 35 | 27 |
*in million units
Further analysis shows the variable costs (production, inventory and holding, transportation, tax, and tariffs) of meeting demand from a source to a market per 1,000,000 units:
Demand Region | ||||||
Production and Transportation Cost per 1,000,000 units | ||||||
Supply Region | England | France | Spain | Germany | Italy | Sweden |
England | 150 | 180 | 133 | 189 | 128 | 120 |
France | 124 | 232 | 190 | 191 | 202 | 72 |
Spain | 227 | 231 | 168 | 194 | 143 | 235 |
Germany | 149 | 115 | 100 | 137 | 116 | 99 |
Italy | 236 | 178 | 122 | 94 | 243 | 226 |
Sweden | 248 | 73 | 70 | 226 | 246 | 116 |
*in thousands of dollars
The company considers two plant sizes in each location. The annualized fixed cost of plants for each location is found to be:
Fixed Cost ($) | Low Capacity | Fixed Cost ($) | High Capacity | |
England | 17,000 | 20 | 19,000 | 35 |
France | 12,000 | 20 | 15,000 | 35 |
Spain | 10,000 | 20 | 14,000 | 35 |
Germany | 9,000 | 20 | 14,000 | 35 |
Italy | 8,000 | 20 | 12,000 | 35 |
Sweden | 9,000 | 20 | 13,000 | 35 |
*in thousands of dollars
- (8 points) What is the lowest cost achievable for the production and distribution network?
- (9 points) What is the minimum cost configuration (where are the plants located and what is the capacity of each plant)?
- (8 points) Which plants serve which market in what volume?
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