Question

In: Operations Management

Northeastern Insurance Company is considering opening an officein the U.S. The two cities under consideration...

Northeastern Insurance Company is considering opening an office in the U.S. The two cities under consideration are Philadelphia and New York. The factor ratings (higher scores are better) for the two cities are given in the following table.

Factor

Weight

Philadelphia

New York

Customer convenience

0.25

70

80

Bank accessibility

0.20

35

95

Computer support

0.20

90

70

Rental costs

0.15

95

55

Labor costs

0.10

75

45

Taxes

0.10

85

50

Based on the given information, the best location for Northeastern Insurance Company to open the office is _________ with a total weighted score of______.

(Enter your response rounded to two decimal places.)

Solutions

Expert Solution

We will calculate overall weighted score for both cities.

Weighted score= Summation (Weights * Factor rating)

Weighted score (Philadelphia) = 0.25*70+0.20*35+0.20*90+0.15*95+0.10*75+0.10*85 =72.75

Weighted score (New York) = 0.25*80+0.20*95+0.20*70+0.15*55+0.10*45+0.10*50 =70.75

Hence,

Based on the given​ information, the best location for Northeastern Insurance Company to open the office is Philadelphia with a total weighted score of 72.75.


Related Solutions

Northeastern Insurance Company is considering opening an office in the U.S. The two cities under consideration...
Northeastern Insurance Company is considering opening an office in the U.S. The two cities under consideration are Philadelphia and New York. The factor ratings​ (higher scores are​ better) for the two cities are given in the following table.                                                                                                          Factor Weight PhiladelphiaPhiladelphia New YorkNew York Customer convenience 0.25 75 75 Bank accessibility 0.20 40 85 Computer support 0.20 90 70 Rental costs 0.15 85 50 Labor costs 0.10 80 50 Taxes 0.10 90 55 Based on the given​ information, the...
Company ABC is considering opening warehouses in four cities in Canada: Ottawa, Toronto, Calgary and Winnipeg....
Company ABC is considering opening warehouses in four cities in Canada: Ottawa, Toronto, Calgary and Winnipeg. Each warehouse can ship 100 units per day. The daily fixed cost of keeping each warehouse open is $400 for Ottawa, $500 for Toronto, $300 for Calgary and $350 for Winnipeg. Region 1 of the country requires 80 units per day, region 2 requires 70 units per day and region 3 requires 40 per day. The costs (including production and shipping costs) of sending...
The two ME alternatives shown are under consideration for facility improvements in a company in Abu...
The two ME alternatives shown are under consideration for facility improvements in a company in Abu Dhabi. Determine which one should be selected based on a B/C analysis. Assume an interest rate of 10% per year and a 5-year study period.                                                                                                            Alternative X Alternative Y First costs, AED 40,000 90,000 Annual M&O costs, AED per year 50,000 20,000 Benefits, AED per year 120,000 150,000 Disbenefits, AED per year 30,000 10,000 Match the closest correct answers for the below questions:...
A firm is considering the development of several new products. The products under consideration are listed...
A firm is considering the development of several new products. The products under consideration are listed below; the products in each project group are mutually exclusive. The firm has an MARR of 10% per year and a capital investment budget limitation on development costs of $1,500,000. The life of all products is assumed to be ten years. Use the PW method to determine which combination of products that should be selected. Show complete and proper solutions. Group Products Development Costs,...
There are two projects under consideration by the Rainbow factory. Each of the projects will require...
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,000 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $32,500   $22,000     $5,500   $60,000 Beta Project 8,000   23,000     28,000   59,000 (Click here to see present value and future value tables) A. If the discount rate is 10%, compute the NPV of each project. Round your present value factor to three decimal...
Imagine that you are considering going to graduate school for economics. The program under consideration lasts...
Imagine that you are considering going to graduate school for economics. The program under consideration lasts for one year. The program is costly, and the value to you of its credentials is greater if you are not all that skilled and would have struggled to get a good job without the extra degree. On the other hand, if you do turn out to be very skilled in economics, you would get a good job without the degree in addition to...
A HCO is considering its capital budget for the coming year, five projects are under consideration....
A HCO is considering its capital budget for the coming year, five projects are under consideration. Management uses the Profitability Index to rank projects. Given this information, which projects would you recommend the organization undertake with a 4.5 million budget? CCC 5.50% High risk 2.50% Low risk 2.00% Project A Project B Project C Project D Project E Low Risk High Risk Average Risk Average Risk High Risk Year 0        (1,750,000)          (2,250,000)        (2,000,000)          (2,000,000)         (2,500,000) Year 1              450,000                400,000              500,000...
Coca Cola Inc. is considering opening a new bottling plant in the Southeastern U.S. It anticipates...
Coca Cola Inc. is considering opening a new bottling plant in the Southeastern U.S. It anticipates that this plant will increase sales by $8 million per year over the next 15 years. Costs to operate the plant are estimated to be $3 million per year. The company estimates that the cost of constructing the plant along with the cost of the equipment will be $30 million. These costs can be depreciated using straight-line depreciation. At the end of 15 years,...
Phazer, Inc. is considering its plan for the coming capital expansion cycle. Under consideration are three...
Phazer, Inc. is considering its plan for the coming capital expansion cycle. Under consideration are three projects, the particulars of which are presented below. Phazer has a beta coefficient of 1.0682. The current rate of return on treasury securities is 5.8% and the current return on the market proxy is 14.6%. Phazer uses the CAPM to determine its cost of capital for capital budgeting purposes and is in a 34% marginal tax bracket. Project A under consideration has an initial...
The Assurance Life Company is offering an insurance policy under either of the following two terms:...
The Assurance Life Company is offering an insurance policy under either of the following two terms: a. Make a series of twelve $1,200 payments at the beginning of each of the next 12 years (the first payment being made today). b. Make a single lump sum payment today of $10,000 and receive coverage for the next 12 years. If you had investment opportunities offering an 8 percent annual return, which alternative would you prefer?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT