Chapter
13 Supply Chain Logistic Networks
DISCUSSION QUESTIONS
1. Answers depend on the specific organizations and industries selected by the teams. Some
expected tendencies for manufacturers are:
Favorable labor climate Textiles, furniture, consumer electronics
Paper, plastic pipe, cars, heavy metals, and food
Proximity to markets
processing
Quality of life High technology and research firms
Paper mills, food processors, and cement
Proximity to suppliers and resources
manufacturers
Feeder plants and certain product lines in computer
Proximity to company’s other facilities
manufacturing industry
For service providers, the usually dominant location factor is proximity to customers, which
is related to revenues. Other factors that also can be crucial are transportation costs and
proximity to markets (such as for distribution centers and warehouses), location of
competitors, and site-specific factors such as retail activity and residential density for
retailers. Data collection relates to the factors selected, which can be collected with on-site
visits or from consultants, chambers of commerce, governmental agencies, banks, and the
like. For locations in other countries, additional information is needed about differences in
political differences, labor laws, tax laws, regulatory requirements, and cultural differences.
It is also important to assess how much control the home office should retain, and the extent
to which new techniques will be accepted.
2. The “rust belt” city has made long-term investments in the stadium, roads, zoning, and
planning to the benefit of the baseball team (an entertainment service). Leaving the rust belt
city leaves the city with these long-term obligations with no means to pay for them. For
example, when General Motors closed a large facility in a small community, the results
were so devastating that the community sued GM for damages. Retailers in the vicinity
have built facilities and operate stores that may not be viable any longer if the team moves.
Baseball fans also may not be too sympathetic with the baseball owner.
3. The firm would be well advised to consider both the current state of affairs and potential
future action required should the firm finalize this plant location decision. Once the plant is
purchased, the firm may take on responsibility for remediating previous plant-management
decisions.
Regarding the environmental impact of current practices, the firm should consider such
aspects as (1) the plant’s current carbon footprint and the costs to reduce, (2) the carbon
Copyright © 2016 Pearson Education, Inc.
,l PART 3 l Managing Supply Chains
footprint of suppliers that may be used should this location be selected, (3) overall plant
energy costs, (4) contamination that may need to be remediated, (5) any known hazardous
conditions that will have to be corrected, and , (6) long term health concerns for employees
and local populations due to prior hazardous pollution.
Regarding workplace safety, unless the firm will repurpose the plant, it will need to
consider all current practices that it will use once the plant is purchased. The new firm will
need to (1) review all employment policies and procedures to ensure compliance with their
company policies, (2) review any pre-employment screening protocols such as random drug
and alcohol testing (3) ensure that previous management has complied with the relevant
federal law such as providing medical leave for employees or nondiscrimination in the
workplace (4) ensure the plant has maintained adequate records, for example in instances of
employees discharged for misconduct, and (5) consider the cost and time needed for
process redesign and/or addition of safety equipment to bring safety requirements up to the
OSHA standards.
Copyright © 2016 Pearson Education, Inc.
, Supply Chain Logistic Networks l CHAPTER 13 l
PROBLEMS
Load-Distance Method
1. Distance between three points
Point A = (20, 20)
Point B = (50, 10)
Point C = (50, 60)
a. Euclidean distance d AB = ( x A − xB ) 2 + ( y A − yB ) 2
dAB = (20 − 50 )2 + (20 − 10 )2 dBC = (50 − 50 )2 + (10 − 60 )2
= (900 + 100 ) = ( 0 + 2500 )
= 31.62 = 50
dAC = (20 − 50 )2 + (20 − 60 )2
= (900 + 1600 )
= 50.0
b. Rectilinear distances dAB = xA − xB + yA − yB
dAB = 30 + 10 = 40
dBC = 0 + 50 = 50
dAC = 30 + 40 = 70
2. West Gorham High School
a. The weighted latitude and longitude calculations are found in the following Excel
spreadsheet.
Weighted Weighted
Population Latitude Longitude
Latitude Longitude
L x y lx ly
Westbrook 16,000 43.6769 70.3717 698,830 1,125,947
Scarborough 22,000 43.5781 70.3222 958,718 1,547,088
Gorham 36,500 43.6795 70.4447 1,594,302 2,571,232
Sum 74,500 3,251,850 5,244,267
x* 43.6490
y* 70.3928
Optimal latitude and longitude follow are calculated as follows:
*
∑i li xi 698,830 + 958, 718 + 1,594,302
x = = = 43.6490
∑ li
i
74,500
Copyright © 2016 Pearson Education, Inc.
13 Supply Chain Logistic Networks
DISCUSSION QUESTIONS
1. Answers depend on the specific organizations and industries selected by the teams. Some
expected tendencies for manufacturers are:
Favorable labor climate Textiles, furniture, consumer electronics
Paper, plastic pipe, cars, heavy metals, and food
Proximity to markets
processing
Quality of life High technology and research firms
Paper mills, food processors, and cement
Proximity to suppliers and resources
manufacturers
Feeder plants and certain product lines in computer
Proximity to company’s other facilities
manufacturing industry
For service providers, the usually dominant location factor is proximity to customers, which
is related to revenues. Other factors that also can be crucial are transportation costs and
proximity to markets (such as for distribution centers and warehouses), location of
competitors, and site-specific factors such as retail activity and residential density for
retailers. Data collection relates to the factors selected, which can be collected with on-site
visits or from consultants, chambers of commerce, governmental agencies, banks, and the
like. For locations in other countries, additional information is needed about differences in
political differences, labor laws, tax laws, regulatory requirements, and cultural differences.
It is also important to assess how much control the home office should retain, and the extent
to which new techniques will be accepted.
2. The “rust belt” city has made long-term investments in the stadium, roads, zoning, and
planning to the benefit of the baseball team (an entertainment service). Leaving the rust belt
city leaves the city with these long-term obligations with no means to pay for them. For
example, when General Motors closed a large facility in a small community, the results
were so devastating that the community sued GM for damages. Retailers in the vicinity
have built facilities and operate stores that may not be viable any longer if the team moves.
Baseball fans also may not be too sympathetic with the baseball owner.
3. The firm would be well advised to consider both the current state of affairs and potential
future action required should the firm finalize this plant location decision. Once the plant is
purchased, the firm may take on responsibility for remediating previous plant-management
decisions.
Regarding the environmental impact of current practices, the firm should consider such
aspects as (1) the plant’s current carbon footprint and the costs to reduce, (2) the carbon
Copyright © 2016 Pearson Education, Inc.
,l PART 3 l Managing Supply Chains
footprint of suppliers that may be used should this location be selected, (3) overall plant
energy costs, (4) contamination that may need to be remediated, (5) any known hazardous
conditions that will have to be corrected, and , (6) long term health concerns for employees
and local populations due to prior hazardous pollution.
Regarding workplace safety, unless the firm will repurpose the plant, it will need to
consider all current practices that it will use once the plant is purchased. The new firm will
need to (1) review all employment policies and procedures to ensure compliance with their
company policies, (2) review any pre-employment screening protocols such as random drug
and alcohol testing (3) ensure that previous management has complied with the relevant
federal law such as providing medical leave for employees or nondiscrimination in the
workplace (4) ensure the plant has maintained adequate records, for example in instances of
employees discharged for misconduct, and (5) consider the cost and time needed for
process redesign and/or addition of safety equipment to bring safety requirements up to the
OSHA standards.
Copyright © 2016 Pearson Education, Inc.
, Supply Chain Logistic Networks l CHAPTER 13 l
PROBLEMS
Load-Distance Method
1. Distance between three points
Point A = (20, 20)
Point B = (50, 10)
Point C = (50, 60)
a. Euclidean distance d AB = ( x A − xB ) 2 + ( y A − yB ) 2
dAB = (20 − 50 )2 + (20 − 10 )2 dBC = (50 − 50 )2 + (10 − 60 )2
= (900 + 100 ) = ( 0 + 2500 )
= 31.62 = 50
dAC = (20 − 50 )2 + (20 − 60 )2
= (900 + 1600 )
= 50.0
b. Rectilinear distances dAB = xA − xB + yA − yB
dAB = 30 + 10 = 40
dBC = 0 + 50 = 50
dAC = 30 + 40 = 70
2. West Gorham High School
a. The weighted latitude and longitude calculations are found in the following Excel
spreadsheet.
Weighted Weighted
Population Latitude Longitude
Latitude Longitude
L x y lx ly
Westbrook 16,000 43.6769 70.3717 698,830 1,125,947
Scarborough 22,000 43.5781 70.3222 958,718 1,547,088
Gorham 36,500 43.6795 70.4447 1,594,302 2,571,232
Sum 74,500 3,251,850 5,244,267
x* 43.6490
y* 70.3928
Optimal latitude and longitude follow are calculated as follows:
*
∑i li xi 698,830 + 958, 718 + 1,594,302
x = = = 43.6490
∑ li
i
74,500
Copyright © 2016 Pearson Education, Inc.
