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DM Office Products (DMOP) is a wholesale supplier of Office products with one facility in Pennsylvania. It has decided to build a new distribution warehouse in the state of New York to help serve the growing demand in that market. It has four major customers located in Buffalo, Syracuse, Albany, and New York City. Though New York City is the largest market, it also has the greatest competition and DMOP is not a major player there. When DMOP ships an order to a customer it uses its small fleet of two trucks to deliver, so the cost of delivery is essentially the same for a full or partially full truck. The expected number of annual shipments to each city and their coordinates on an x, y grid is shown in the following table

Use the centroid method to recommend a location for the new warehouse for DMOP. Round your coordinates to one decimal place

Short Answer

Expert verified

A warehouse is a structure used to store commodities. Producers, exporters, traders, distributors, transportation companies, customs, and others use warehouses.

Step by step solution

01

Explanation

A warehouse is a location where raw materials or processed items can be held before being distributed for sale. A warehouse is a facility that is used to store bulk products or items (wares) for business reasons.

02

Explanation

Given,

By Centroid Method:

Hence, the location of the new warehouse = (1647.485, 445.168)

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Question:Outline a plan for introducing lean at Quality Parts Company.

One of your Taiwanese suppliers has bid on a new line of molded plastic parts that are currently being assembled at your plant. The supplier has bid \(0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory are estimated at \)0.01 per unit. Additional inventory handling charges should amount to \(0.005 per unit. Finally, administrative costs are estimated at \)20 per month. Although your plant can continue producing the part, the plant would need to invest in another molding machine, which would cost \(10,000. Direct materials can be purchased for \)0.05 per unit. Direct labor is estimated at \(0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at \)0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor cost. The firm uses a cost of capital of 15 percent per year. What should you do, continue to produce in-house, or accept the bid from your Taiwanese supplier?

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