Analysis of region distribution center location

Assignment Help Operation Management

Reference no: EM13109027

"Fireside Tire Company, a manufacturer of radial tires for sport utility vehicles, sells its products in the automotive aftermarket and distribution them throughout the United States. Fireside has three tire production plants located in Allentown, Pennsylvania; Toledo, Ohio; and Macomb, Illinois (see map). Normally, Fireside ships tires from its plants to distribution centers, but truckload-size purchases typically are transported directly from plants to customer locations. All shipments to a region move under truck-load rates applying to a minimum weight of 40,000 pounds, or 400 cwt.

Fireside management is concerned about the most economical location for a distribution center to serve its southeastern region, consisting of North Carolina, South Carolina, Georgia, Florida, Mississippi, Alabama, and southeastern Tennessee. Although an Atlanta distribution center currently serves this region, Fireside management is concerned that the Atlanta location is not the most logistically sound alternative.

To help the logistics department conduct an analysis of this region's distribution center location using the grid method. Fireside's transportation department developed the following data based on projections for 2008:

2008 Shipments to Atlanta Grid Coordinates

From CWT RATE/CWT Mileage Horizontal Vertical

Toledo 15K $2.20 640 1,360 1,160
Macomb 5K $2.43 735 980 1,070
Allentown 11K $2.52 780 1,840 1,150

2008 Shipments From Atlanta Grid Coordinates

TO CWT Horizontal Vertical
Chattanooga 2,700 1,350 650
Atlanta 3,500 1,400 600
Tampa 4,300 1,570 220
Birmingham 2,800 1,260 580
Miami 5,300 1,740 90
Jacksonville 5,100 1,600 450
Columbia 2,200 1,600 650
Charlotte 2,900 1,590 740
Raleigh/Durham 2,200 1,700 800

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

1.Use Excel to complete the table and calculations! Show the details behind the results. Use $7/CWT for shipments "From Atlanta."
2.Familiarize yourself with the "Example of a Heuristic Modeling Approach: The Grid Technique" described starting on pg 542.
3.Note the meaning of the "Lower" and "Upper-Case" variables denoted on pg 544. Lower Case = Raw materials, Upper-Case = Finished Goods.
4.Study Table 12-2 to verify the Grid Center justifies Atlanta; does it or not, verify how close the number comes to the locations specified on pg 558.
5.Given the state of freight costs and different modes available, does it make sense for the business, what would you recommend.

Reference no: EM13109027

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