DIGITAL ASSIGNMENT I

PRODUCTION AND OPERATIONS MANAGEMENT

BAGWE KSHITIJ PRAVINKUMAR

15BME0773
SLOT –C2

Dell
[Email address]
 DIGITAL ASSIGNMENT I

Think you are planning small scale industry and you have selected
at least three based on criteria laid for selection of plant location
(one in city , one in town suburbs and one in rural areas).
Considering the total cost method , find the best location for your
plant.
Solution -
TOTAL COST METHOD
Break-even analysis
1. Determine the fixed and variable costs for each location.
2. Identify the indifference point for each pair of location alternatives.
3. Identify the ranges of output for which each location has the lowest total cost.
4. Select the location that gives the lowest cost for the design capacity of the new
facility.
C&A Electronic is considering three possible sites for its new DVD plant. The annual
fixed and variable costs for each site are:

LOCATION FIXED COSTS VARIABLE

COSTS

LEXINGTON $650,000 $50/unit

WILMORE $350,000 $65/unit

NEW YORK $850,000 $75/unit

1. Determine the fixed and variable costs for each location

Let Q be the demand of DVD,
TC(Lexington) = 650000 + 50Q
TC(Wilmore) = 350000 + 65Q
TC(New York) = 850000+ 75Q
2. Identify the indifference points between each pair of location alternatives
Let Q* be indifference demand,
TC(Lexington) = TC(Wilmire) at Q*
650000 + 50Q* = 350000 + 65Q*
 DIGITAL ASSIGNMENT I

Q* = 300000/15 = 20,000 units

TC(New York ) = TC(Wilmire) at Q*
850000 + 75Q* = 350000 + 65Q*
Q* = 500000/10 = 50,000 units

3. Identify the ranges of output for which each location has the lowest total costs
At Q = 0,
TC(Lexington) = $ 650,000
TC(Wilmore) = $ 350,000
TC(New York) = $ 850,000
Q < 20,000, Wilmore has the lowest total cost; For Q between 20,000 to 50, 000 lexington
has the lowest cost. For Q > 50,000 New York has the lowest total costs

4. Select the location that gives the lowest cost for the design capacity of the new facility
If Q = 25,000
Q > Q* (20,000)  Lexington should be chosen as the location for the new facility

Here C is Lexington B is Wilmore and A is New York.

 DIGITAL ASSIGNMENT I

Give comments on the various e-vendors/commerce websites for a

specific group of product which you have dealt with. And assign
various factors for the evaluation of vendor. Choose at least 5
different vendors for the problem.
SOLUTION-

We have chosen clothes as our group of product here. E commerce vendors that we have
chosen are Flipkart , Amazon, Myntra , Snapdeal And Jabong. The evaluation criteria that
we have chosen is the standard evaluation criteria that most of the agencies use. We have
tried to considered all the factors for our group of products that is clothes and we have
obtained the data from various websites which evaluates e commerce vendors. The link for
references from which this data is derived is given below in references. We have used factor
rating method in order to calculate which site is more effective and the result was Myntra
was more user friendly which is then followed by Amazon.

Evaluation criteria Factor Flipkart Amazon Myntra Snapdeal Jabong

rating
The site provides complete and 0.3 65 88 92 70 62
relevant information about the
product
Details and specifications are 0.1 78 72 87 71 68
easily understandable by
common users
The site has help for clarifying 0.05 61 76 78 59 63
information which is difficult to
understand
The site provides content that is 0.1 75 84 83 72 67
unique and unavailable from the
sites of its competitors
The site provides complete 0.05 62 92 89 86 82
information about prices
The site provides complete 0.2 77 81 74 79 69
shipping details information

The site provides complete 0.2 82 90 94 71 67

information on payment options
, procedures and policies
The site gives feedback 0.1 64 76 81 58 69
information on the products

The site allows users to enter 0.05 76 78 85 80 72

feedback on products
1 82.95 88.1 91.9 82.35 77.05
TOTAL SCORE
 DIGITAL ASSIGNMENT I

REFERENCES –
1.https://www.shopify.com/blog/customer-retention-strategies
2. https://www.wisdomjobs.com/e-university/production-and-operations-management-
tutorial-295/location-models-9476.html
3. https://www.wikihow.com/Evaluate-an-E-commerce-Website
4. https://www.epd.gov.hk/eia/register/report/eiareport/eia_2292015/3_Annex/9/Annex
%209B.pdf
5. https://www.slideshare.net/piyushrds/facility-location-and-techniques-piyush-sharma-
13101002