Reference no: EM133132766

Consider a restaurant that makes and delivers pizzas to its customers. The spatial distribution of customers is as follows: 10 customers are in location W, 10 miles due west of the city center; 50 customers are at the city center; 25 customers are in location E, 1 mile due east of the city center; and 45 customers are in location F, 2 miles east of the city center. Production costs are the same everywhere so the restaurant's location choice is completely driven by the goal to minimize delivery costs. Delivery to each customer requires a separate trip.

a. Using a graph, show where the restaurant should locate. Explain your location choice.

b. Suppose that point W is in a valley and point F is at the top of a mountain. Therefore, the unit cost of easterly transport (shipments from west to east) is twice the unit cost of westerly transport. If production costs are still the same everywhere, where should the restaurant locate? Explain.