BUS FPX 4014 Assessment 4 Planning and Facility Location
Phillip March 6, 2024 No Comments

BUS FPX 4014 Assessment 4 Planning and Facility Location

BUS FPX 4014 Assessment 4 Planning and Facility Location

Name

Capella university

BUS-FPX4014 Operations Management for Competitive Advantage

Prof. Name

Date

Component #1: Operations Management Issue Analysis

In the given scenario, the primary operations management concern revolves around determining the optimal expansion strategy for Jackson’s facility while considering the return on investment (ROI). The decision-making process is crucial, weighing the options between a Larger Expansion (LE) or a Smaller Expansion (SE) followed by potential subsequent expansions. An analysis is required to evaluate the probabilities associated with high and low demand scenarios:

  • Probability of High Demand: 60%
  • Probability of Low Demand: 40%

The SE involves an initial profit projection of $35,000, with the potential necessity of a second expansion yielding a combined profitability of $55,000 in case of high demand. Conversely, the LE offers an estimated profitability of $90,000 under high demand conditions but diminishes to $52,000 if demand turns out to be low.

BUS FPX 4014 Assessment 4 Planning and Facility Location

Component #2: Decision Analysis

In order to arrive at a decision, it is imperative to assess various scenarios, their associated probabilities, and the corresponding profitability outcomes:

Small Expansion (SE):

  • High Demand: $55,000 (probability: 60%)
  • Low Demand: $35,000 (probability: 40%)

Large Expansion (LE):

  • High Demand: $90,000 (probability: 60%)
  • Low Demand: $52,000 (probability: 40%)

Based on the analysis, it is recommended for Jackson to pursue the LE option. Irrespective of demand fluctuations, the LE offers higher profitability compared to the SE, without the potential need for subsequent expansions that might impact patient services.

Component #3: Load-Distance Analysis

Conducting a load-distance analysis involves the computation of the final load distance (LD) numeric value. The objective is to minimize LD by strategically positioning stations closer to each other:

  • Final Load Distance Calculation: 27,960

The outcome suggests consolidating stations in close proximity to each other to reduce travel distances between them.

BUS FPX 4014 Assessment 4 Planning and Facility Location