2. Titan Susan Li, vice president for operations of HHN, Inc., a manufacturer of cabinets...

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Accounting

2. Titan Susan Li, vice president for operations of HHN, Inc., a manufacturer of cabinets for telephone switches, is constrained from meeting her 5-year forecast by limited capacity at the company's three existing plants. These plants are Waterloo, Pusan, and Bogota. As her able assistant, you have been told that because of existing capacity constraints and the expanding world market for HHN cabinets, a fourth plant is to be added. The real estate department has advised Susan that two sites seem particularly good because of stable political situations and tolerable exchange rates. These two locations are Dublin, Ireland and Fontainebleau, France. Susan suggests that from the data collected in the following table, which provide production and transportation costs, you should be able to determine where the fourth plant should be located. Solve this problem and explain the selected choice to Susan. Also, provide the delivery schedule of your solution.

Plant Location
Market Area Waterloo Pusan Bogota Fontainebleau Dublin

Canada:

Demand 4000

Production Cost 50 30 40 50 45
Transportation Cost 10 25 20 25 25
South America: Demand 5000
Production Cost 50 30 40 50 45
Transportation Cost 20 25 10 30 30

Pacific Rim:

Demand 10000

Production Cost 50 30 40 50 45
Transportation Cost 25 10 25 40 40

Europe:

Demand 5000

Production Cost 50 30 40 50 45
Transportation Cost 25 40 30 10 20
Capacity 8000 2000 5000 9000 9000

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