Assume that a plant manager has to decide where to locate its warehouse The decision has been narrowed down to choices among the following three cities: Detroit, Cleveland, and St. Louis. The company has weighted each of these criteria in terms of its relative importance in the decision making process, and it has analyzed each potential warehouse location and graded them according to each criteria as shown in the following table.
$$\begin{array} { | l | c | c | c | c | }
\hline { \text { Decision Criteria } } & \text { Weight } & \begin{array} { c }
\text { Grades } \
\text { for } \
\text { Detroit }
\end{array} & \begin{array} { c }
\text { Grades } \
\text { for } \
\text { Cleveland }
\end{array} & \begin{array} { c }
\text { Grades } \
\text { for } \
\text { St. Louis }
\end{array} \
\hline \text { Proximity to suppliers } & .45 & 80 & 70 & 60 \
\hline \text { Proximity to customers } & .35 & 75 & 90 & 80 \
\hline \text { Land and construction costs } & .20 & 60 & 50 & 85 \
\hline
\end{array}$$
From the scores for each location, determine where the warehouse should be located.
A) Detroit
B) Cleveland
C) St. Louis
D) Cleveland and St. Louis are equally preferred.

Question

Assume that a plant manager has to decide where to locate its warehouse The decision has been narrowed down to choices among the following three cities: Detroit, Cleveland, and St. Louis. The company has weighted each of these criteria in terms of its relative importance in the decision making process, and it has analyzed each potential warehouse location and graded them according to each criteria as shown in the following table.
$$\begin{array} { | l | c | c | c | c | } 
\hline { \text { Decision Criteria } } & \text { Weight } & \begin{array} { c } 
\text { Grades } \
\text { for } \
\text { Detroit }
\end{array} & \begin{array} { c } 
\text { Grades } \
\text { for } \
\text { Cleveland }
\end{array} & \begin{array} { c } 
\text { Grades } \
\text { for } \
\text { St. Louis }
\end{array} \
\hline \text { Proximity to suppliers } & .45 & 80 & 70 & 60 \
\hline \text { Proximity to customers } & .35 & 75 & 90 & 80 \
\hline \text { Land and construction costs } & .20 & 60 & 50 & 85 \
\hline
\end{array}$$
From the scores for each location, determine where the warehouse should be located.
A) Detroit
B) Cleveland
C) St. Louis
D) Cleveland and St. Louis are equally preferred.

Quizplus · Accepted Answer

To determine the best location, calculate the weighted score for each city:- Detroit: $0.45 \times 80 + 0.35 \times 75 + 0.20 \times 60 = 36 + 26.25 + 12 = 74.25$- Cleveland: $0.45 \times 70 + 0.35 \times 90 + 0.20 \times 50 = 31.5 + 31.5 + 10 = 73$- St. Louis: $0.45 \times 60 + 0.35 \times 80 + 0.20 \times 85 = 27 + 28 + 17 = 72$Detroit has the highest weighted score, making it the preferred location.

Assume That a Plant Manager Has to Decide Where to Locate