Operation Management Questions

Topics: Harshad number Pages: 3 (765 words) Published: December 3, 2012
Factor Rating (Facility Location)
Example-01
A manufacturer of garments is actively considering five alternative locations for setting up its factory. The locations vary in terms of their advantages to the firm. Hence, the firm requires a method of identifying the most appropriate location. Based on a survey of its senior executives, the firm has arrived at six factors to be considered for final site selection. The rating of each factor on a scale of 1 to 100 provides this information. Further, based on the detailed analysis of both the qualitative and quantitative data available for each of the locations, the ratings of the locations against each factor have also been arrived at (on a scale of 0 to 100). Using this information obtain a ranking of the alternative locations and identify the best location. Factor ratings

Factors| Rating|
Availability of infrastructure| 90|
Size of the market| 60|
Industrial relations climate| 50|
Tax benefits and concessions| 30|
Availability of cheap labor| 30|
Nearness to port| 65|

Rating of each location against each factor
Factors| Allahabad| Delhi| Mumbai| Bangalore| Kolkata| Availability of infrastructure| 20| 40| 60| 35| 55|
Size of the market| 30| 30| 40| 60| 80|
Industrial relations climate| 80| 30| 50| 60| 50|
Tax benefits and concessions| 80| 20| 10| 20| 20|
Availability of cheap labor| 70| 70| 45| 50| 50|
Nearness to port| 20| 40| 90| 50| 60|

Solutions
Factors| Rating| Relatives weights|
Availability of infrastructure| 90| 0.28|
Size of the market| 60| 0.18|
Industrial relations climate| 50| 0.15|
Tax benefits and concessions| 30| 0.09|
Availability of cheap labor| 30| 0.09|
Nearness to port| 65| 0.20|
Sum of all factor rating| 325| 1.00|
Overall rating for Allahabad
= (20×0.28)+(30×0.18)+(80×0.15)+(80×0.09)+(70×0.09)+(20×0.20) = 41 Overall rating for Delhi
=...
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