Internet Case Study For Chapter 8

Topics: Variable cost, Costs, 5 Pages: 3 (419 words) Published: December 20, 2014
Internet Case Study for Chapter 8: Location Strategies.
Southwestern University’s Location Decision
Question 1:
The 5 factors that are selected by Gardner for evaluation seem reasonable. But for a decision as important as this to make it based on just 5 factors seems unwise as it does not reflect the numerous variables. However, they are the most important and crucial things that must be considered when deciding which is the best option. Some more factors that could be considered are availability of hotels, bars and restaurants in the vicinity, any kind of financial support from the local authorities, local regulations regarding building or expanding structures etc Question 2:

Option
Fixed cost
Variable cost
The cost formula
Option 1:
Expand
$1,000,000
$1
y= 1,000,000 + x
Option 2:
New stadium
$5,000,000
$2
y= 5,000,000 + 2x
Option 3:
Rent
$1,750,000
(=$200,000*5 + $10*15,000*5)
$1
y= 1,750,000 + x

Question 3:
Grade: A:6; B:5; C:4; D:3; E:2; F:1.

Students’ Rating of Locations
Factors
Weighted
Option 1
Option 2
Option 3
1. Convenience
1/6
6
5
1
2. Guaranteed Availability
1/3
4
3
6
3. Comfort
1/12
5
6
6
4. Cost
1/3
6
3
5
5. National image
1/12
3
5
5
Total
1
5
3.75
4.75

Boosters’ Ratings of Locations
Factors
Weighted
Option 1
Option 2
Option 3
1. Convenience
1/6
3
3
6
2. Guaranteed Availability
1/3
5
4
6
3. Comfort
1/12
4
5
6
4. Cost
1/3
6
4
6
5. National image
1/12
4
4
5
Total
1
4.83
3.92
5.92

College Faculty/Staff Ratings of Locations
Factors
Weighted
Option 1
Option 2
Option 3
1. Convenience
1/6
5
4
3
2. Guaranteed Availability
1/3
6
4
6
3. Comfort
1/12
4
6
5
4. Cost
1/3
6
3
5
5. National image
1/12
5
5
4
Total
1
5.58
3.92
4.92

Sum of rating’s table:

Sum of rating’s

Option 1
Option 2
Option 3
Students
5
3.75
4.75
Boosters
4.83
3.92
5.92
College Faculty/Staff
5.58
3.92
4.92
Total
15.41...
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