Question

In: Operations Management

EDS is a national distributor of office supplies that delivers goods to department and specialty stores....

EDS is a national distributor of office supplies that delivers goods to department and specialty stores. They are planning to build a large distribution center in California and is analyzing different location sites. Your team has been assigned the task of selecting a major city in your state that should be the site of the new distribution center. Below are some considerations: a. At present, EDS has no distribution center in your state b. The goal is to locate a major city that has easy access to highways, so that they can reach other locations in California. Although your decisions are subjective, justify your assumptions (E.g. volumes, factor ratings etc) c. Go to the internet and find a map of California and get relevant information on traffic patterns, skills of population and other geographic factors. d. Decide the best location and explain your decision. Use models of your choice – center of gravity and/or factor rating (define at least 5 factors).

Solutions

Expert Solution

The goal is to locate a major city that has easy access to highways, so that they can reach other locations in California.

Major Cities in California are-

City

Population (2015 Census)

Description

Los Angeles

3,971,883

Los Angeles is one of the world's centers of media, business, and international trade. It is the second most populous city in the United States. It is also the home to renowned institutions covering a broad range of educational and professional fields, and it is one of the most substantial economic engines of the United States. Los Angeles (and its Hollywood district) leads the world in producing entertainment such as motion pictures, television, and recorded music. It is also home to the Wilshire Grand Center, California’s tallest building, standing at 1,100 feet tall.

San Diego

1,394,928

San Diego sits in the extreme south of California on the border with Mexico. The city has miles of beaches and a number of U.S. military facilities as well as the world's busiest land border crossing. It is known as "the birthplace of California" since it was the first European landfall and the first European settlement in present-day California. The city's economy largely relies on US defense and military-related industries, tourism, and some international trade. It is home to a number of institutions of higher learning, including the University of California, San Diego, the University of San Diego, San Diego State University, NewSchool of Architecture + Design, the headquarters and main campus of National University and Point Loma Nazarene University.

San Jose

1,026,908

San Jose was founded on November 29, 1777, as one of the first towns in the Spanish colony of Nueva California, which later became Alta California.[2] The town of San Jose served 1849–1851 as the first state capital, when California gained statehood in 1850.[3] After more than 150 years as an agricultural center, San Jose grew due to demand for housing from soldiers returning from World War II, as well as the city's aggressive expansion policy during the 1950s and 1960s as it annexed large portions of land area which helped increase its population. By the 1990s, San Jose's location within the then-booming local technology industry earned the city the nickname Capital of Silicon Valley, and it hosts several prominent technology companies including Adobe Systems and Cisco Systems. San Jose is home to the National Hockey League's San Jose Sharks in addition to Major League Soccer's San Jose Earthquakes, as well as San Jose State University.

Factor Rating Chart – (Score 0 to 100)

Location Factor

Weight

Los Angeles

San Diego

San Jose

Labor Pool

0.1

90

80

70

Proximity to Suppliers

0.1

90

85

80

Wage Rates

0.05

70

85

90

Proximity to Customers

0.05

95

90

85

Highway connectivity

.5

100

90

85

Air Service

.2

100

95

90

Total

1

96.25

89.25

84.25

Based on the information provided above in cities comparison and factor ratings the best city for distribution center in California is Los Angeles.


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