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 0.20 90 65 90
Currency Stability 0.50 80 90 80
Proximity to Market 0.30 80 80 80

Which location should be chosen for the new facility based on the weighted factory location model?
1) Site A
2) Site B
3) Site C
4) All sites are equally attractive

Answer 1

The weighted factory location model takes into account three factors: labor costs, currency stability, and proximity to market. Each factor has a different weight assigned to it to reflect its importance. Based on the scores achieved by each location and the respective weights, all sites are equally attractive.

Step-by-step explanation:

The weighted factory location model takes into account three factors: labor costs, currency stability, and proximity to market. Each factor has a different weight assigned to it to reflect its importance. In this case, labor cost has a weight of 0.20, currency stability has a weight of 0.50, and proximity to market has a weight of 0.30.

1. To determine which location should be chosen, we need to multiply the score achieved by each location for each factor by its respective weight.
2. For Site A: (0.20 * 90) + (0.50 * 80) + (0.30 * 80) = 18 + 40 + 24 = 82
3. For Site B: (0.20 * 65) + (0.50 * 90) + (0.30 * 80) = 13 + 45 + 24 = 82
4. For Site C: (0.20 * 90) + (0.50 * 80) + (0.30 * 80) = 18 + 40 + 24 = 82

All three locations have a total score of 82, so all sites are equally attractive based on the weighted factory location model.