Question

A certain organization trying to decide where to locate their future factory is considering three locations. They are taking into account three factors: labor costs, currency stability, and proximity to market. Using the weights for each factor listed below and the scores achieved by each of the three considered locations, determine which location should be chosen for the new facility based on the weighted factory location model.FACTOR WEIGHT SITE A SITE B SITE C
Labor Cost 0.40 80 80 75
Currency Stability 0.30 80 85 80
Proximity to Market 0.30 85 80 95Options:
a. Site A
b. Site B
c. Site C
d. All sites are equally attractive.

Answer 1

Answer:

Option (C) is correct.

Explanation:

Total weighted score:

= (Labor cost score × Weight) + (currency stability score × Weight) + (proximity to market × Weight)

Weighted score for Site A:

= (80 × 0.40) + (80 × 0.30) + (85 × 0.30)

= 81.5

Weighted score for Site B:

= (80 × 0.40) + (85 × 0.30) + (80 × 0.30)

= 81.5

Weighted score for Site C:

= (75 × 0.40) + (80 × 0.30) + (95 × 0.30)

= 82.5

From the above calculation of weighted score, it can be seen that the weighted score of site C is the highest.

Therefore, Site C should be chosen for the new facility based on the weighted factory location model.