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Firestone Tire Company Case Study using Grid method

Please see case study "Fireside Tire Company" ( file attached) and answer the following Case Questions (file attached).

1. Base on the available information, is Atlanta the best location for a distribution center to serve the southeastern region? If not, what would you recommend?

2. The Fireside transportation department projects a 25% rate increase in 2013 from all of its transportation providers. How will this affect the southeastern location?

3. Marketing anticipates that the Raleigh/Durham market will grow by 3,000 cwt in 2014, and that Fireside will serve the growth from Allentown. How will this affect Atlanta as a location?

Please show any applicable computation work and cite outside sources. I have also included an examples of the grid method from the textbook please ensure the format is similar in the response(s).


Solution Preview

1) There are a few calculations that are needed to find the center, but which are not shown in the example file you provided. I will go over these calculations first.

a) The problem does not specify the Rate/CWT for transporting FROM Atlanta, so we will make an assumption using the information given.

The Total CWT FROM Atlanta was 2,700 + 3,500 + ... + 2,2200 = 31,000
This means a total weight of 31,000 CWT was transported FROM Atlanta. A shortcut is to notice that the weight going into Atlanta should be equal to the weight coming from Atlanta, so you could just add the weight going into Atlanta, and find it to be 31,000 CWT, and equate that to the weight FROM Atlanta.

The total freight expenditures FROM Atlanta were given to be $217,000.

So, the average Rate /CWT = $217,000/31,000 = $7.

The rate/CWT for transporting from any location FROM Atlanta is assumed to be $7. Note where $7 has been entered in the attached ...

Solution Summary

An Excel file and explanation of the calculations involved in the Firestone Tire Company Case Study using the Grid method is provided.