Regional Facility Configuration (Phase II of Framework for Network Design Decisions)

Background

ABC’s Vice President of Supply Chain is working on the second phase of the network design
to identify the regions where the manufacturing plants will be located, their potential roles,
and their approximate capacity. For this purpose, the Vice President has identified two
possible manufacturing capacities for each region-one of 10 capacity units and the other of
20 capacity units and has obtained the cost and demand related data as follows:

Demand Region Fixed Low Fixed High

Logistics Cost per 1000,000 units Cost Capacity Cost Capacity

Supply N.A. S.A. Europe Asia Africa

Region
N.Americ 81 92 101 130 115 6,000 10 9,000 20
a
S.America 117 77 108 98 100 4,500 10 6,750 20
Europe 102 105 95 119 111 6,500 10 9,750 20
Asia 115 125 90 59 74 4,100 10 6,150 20
Africa 142 100 103 105 71 4,000 10 6,000 20
Annual 12 8 14 16 7
Demand
All costs in 000$.
All demand and capacity numbers in 000000 units.
All fixed costs have been annualized.

Identify the optimum regional facility configuration.

RVA

31/08/2020