Question

A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:

be indifferent between these locations
choose Akron
choose Boston
reject both locations

build a plant in both cities

Answer 1

reject both locations

Explanation:

The composite score for Akron is:

`M_(A) = 0.5*60 + 0.4*80 + 0.10*70 = 69`

Since a composite score of 75 is required, Akron should be rejected.

The composite score for Boston is:

`M_(B) = 0.5*70 + 0.4*50 + 0.10*90 = 64`

Boston also has a composite score below 75, so it should also be rejected.

The correct answer is:

reject both locations