Question

A certain organization trying to decide where to locate their future factory is considering three locations. They are taking into account three factors: labor costs, currency stability, and proximity to market. Using the weights for each factor listed below and the scores achieved by each of the three considered locations, determine which location should be chosen for the new facility based on the weighted factory location model.

SCORES (Maximum 100)

FACTOR WEIGHT - SITE A - SITE B - SITE C

Labor Cost - 0.40 - 80 - 80 - 75

Currency Stability - 0.30 - 80 - 85 - 80

Proximity to Market - 0.30 - 85 - 80 - 95


a. Site A

b. Site B

c. Site C

d. All sites are equally attractive.

Answer 1

C. Site C

Step-by-step explanation:

In order to know which one of the sites is more attractive, we should evaluate the weighted scores of each one of them. The one with the greater score, should be chosen.

\left\begin{array}{cccCC}Factor& Factor Weight&SITE A&SITE B&SITE C\\Labor Cost&0.4&80&80& 75\\Currency Stability&0.3&80&85&80\\Proximity to market&0.3&85&80&95\end{array}\right

So, if we want to evaluate Site A, we should evaluate:

Site A= 0.4 * Labor cost (A) + 0.3 * Currency Stability (A) + 0.3 Proximity to market (A) = 0.4* 80 + 0.3 * 80 + 0.3 *85 = 81.5

Site B = 0.4 *80 + 0.3 * 85 + 0.3*80 = 81.5

Site C = 0.4 * 75+ 0.3 * 80 + 0.3* 95 = 82.5

Site C was best scored, so it should be chosen.