The transportation model attempts to find the lowest cost means of shipping from several origins to several destinations. Assume that you are the manager of a multinational manufacturing organization. You have production plants in the United States and Germany. Product A is made in the United States and Product B is made in Germany. Product C is made in both these locations. You currently have distribution centers that ship products to customers in the United States as well as Germany. You want to expand your distribution network by adding a distribution center in Asia.
What are some of the factors you need to consider in determining a location? What are the possible pitfalls that should be avoided when deciding on a location? How would you decide the production plant to ship Product C from?© BrainMass Inc. brainmass.com December 24, 2021, 11:06 pm ad1c9bdddf
SOLUTION This solution is FREE courtesy of BrainMass!
Some factors to consider in determining a location include whether or not there is an adequate pool of potential workers for the facility, as well as the ability to access railways, roads, and or waterways, from the facility for the transportation of products. It is also very important to consider the political aspects of a potential location, due to the fact that some governments may have high taxes and or strong legal restrictions on foreign business operations, which may reduce the efficacy of utilizing a given location. One pitfall that should be avoided when deciding a location is utilizing a location in which there is a scarcity of raw materials. Another pitfall that should be avoided is placing a facility in an area that has an unstable government structure, such as an area undergoing a civil war, etc. A third possible pitfall that should be avoided is utilizing a location in which there is a tremendously high purchase price for real estate, or the land area for the facility. I would decide the production plant to ship product C from, based on which production plant is closest to the majority of the customers that utilize product C on the most consistent basis. I would also partially based this decision upon the plant that produces the highest quality product C as well.© BrainMass Inc. brainmass.com December 24, 2021, 11:06 pm ad1c9bdddf>