Principles of Operations Management, 2/E
Chapter 6
Data Base Applications
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DATABASE APPLICATION - LOCATION
The unification of Europe has brought about changes in airline regulation that dramatically affect major European carriers such as British International Air, SAS, KLM, Air France, Alitalia, and Sabena. With ambitious expansion plans, British International Air (BIA) has decided it needs a second service hub on the continent to complement its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in Western Europe is actively bidding for BIA's business.
After initial investigations by Harry Zipper, head of the Operations Department, BIA has narrowed the list to 16 cities. Each is then rated on 12 factors, with the following table resulting:
| LOCATION |
|
|
Italy |
France |
Germany |
Spain |
Switzerland |
Holland |
Denmark |
Portugal |
| Factor |
Importance
Weight |
Milan |
Rome |
Genoa |
Paris |
Lyon |
Nice |
Munich |
Bonn |
Berlin |
Madrid |
Bern |
Zurich |
Amsterdam |
The Hague |
Copenhagen |
Lisbon |
| Financial incentives |
85 |
8 |
8 |
8 |
7 |
7 |
7 |
7 |
7 |
7 |
9 |
8 |
8 |
9 |
9 |
8 |
10 |
| Skilled labor pool |
80 |
4 |
6 |
5 |
9 |
9 |
7 |
10 |
8 |
9 |
4 |
9 |
10 |
9 |
8 |
7 |
3 |
| Existing facility |
70 |
5 |
3 |
2 |
9 |
6 |
5 |
9 |
9 |
2 |
5 |
7 |
8 |
8 |
2 |
8 |
6 |
| Wage rates |
70 |
9 |
8 |
9 |
4 |
6 |
6 |
4 |
5 |
5 |
10 |
3 |
3 |
5 |
9 |
5 |
10 |
| Competition for jobs |
70 |
7 |
3 |
8 |
2 |
8 |
7 |
4 |
8 |
9 |
6 |
5 |
4 |
3 |
7 |
6 |
6 |
| Ease of air traffic access |
65 |
5 |
4 |
6 |
2 |
8 |
8 |
4 |
8 |
9 |
5 |
5 |
5 |
3 |
9 |
4 |
6 |
| Real estate cost |
40 |
6 |
4 |
7 |
4 |
6 |
6 |
3 |
4 |
5 |
8 |
2 |
1 |
3 |
5 |
4 |
7 |
| Communication links |
25 |
6 |
7 |
6 |
9 |
9 |
9 |
10 |
9 |
8 |
2 |
8 |
8 |
8 |
6 |
9 |
2 |
| Attractiveness to relocating executives |
15 |
4 |
8 |
3 |
9 |
6 |
6 |
2 |
3 |
3 |
4 |
9 |
8 |
9 |
6 |
7 |
3 |
| Political considerations |
10 |
6 |
6 |
6 |
8 |
8 |
8 |
8 |
8 |
8 |
5 |
9 |
9 |
8 |
8 |
8 |
2 |
| Expansion possibilities |
10 |
10 |
2 |
8 |
1 |
5 |
4 |
4 |
5 |
6 |
5 |
3 |
2 |
3 |
8 |
4 |
6 |
| Union strength |
10 |
1 |
1 |
1 |
5 |
5 |
5 |
6 |
6 |
6 |
9 |
8 |
8 |
7 |
7 |
5 |
9 |
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- Help Zipper rank the top three cities that BIA should consider as its new site for servicing aircraft.
- After further investigation, Harry Zipper decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. In lowering the weight of that factor to 30, does the ranking change?
- After Zipper makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200 million deutsch mark package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)?
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