Management application: Distributor Location

As the COO of a medical supply distributor, you are trying to decide where to locate a new distribution center to serve customers in the Alabama-Florida-Georgia tri-state area. You do not currently have a distribution center in this region. Most of your business in this region comes from large hospitals in Birmingham, Atlanta, and Tampa.

Name three factors that would influence your location decision, and explain why each one is important in this case. You must include at least one factor that is not in the table in part 2.

You decide to use the weighted-criteria evaluation system to choose between two alternatives: suburban Jacksonville, Florida (X) and just outside Dothan, Alabama (Y). You decide on the following criteria, weights, and ratings:

		Rating for X	Rating for Y
Access to customers
Business friendly environment
Labor availability
Cost of land

Compute an overall score for the two alternatives and make a decision.

After choosing a geographic area, you evaluate several warehouse sites and narrow your options down to two: A and B. Based on projected costs for each location, you decide to conduct a breakeven analysis of the two options.

	Fixed Costs/yr	Unit Variable Costs

Compute the breakeven quantity between the two locations, and explain what this quantity means.