Location Planning at A.B. Corp.
(2 pages of text)
In March 2010, the management of A.B. Corp. announced its plan to select a definite location for its central warehouse. The company, a major producer of agriculture and farm equipment, had gone through three consecutive years of financial loss as a result of increasing production costs. Management had to select a central warehouse between four candidates, based on the location of five distribution centres, the loads to be transferred, and other factors such as land costs and tax.
The case objective is to understand the interrelationship between quantitative and qualitative factors in decision making. The case provides a good illustration of how a small/medium-sized organization, even with resource constraints, can utilize technological and economic analysis in various plant activities. The case also highlights problems that occur in assessing the trade-offs between various qualitative and quantitative factors. It provides a good foundation for quantitative decision making and teaches students to take a holistic view of factors such as centre of gravity and load-distance for deciding on a suitable location.
India, Small, 2010
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