1. Think about your own community. Draw a map that indicates each retail location and its type. Are similar types together? Are there any outliers? What are the most popular spots and are they surrounded by similar businesses?
2. River City Cement Co. maintains an inventory of lime that is purchased from a local supplier. River City uses an average of 200,000 pounds of lime annually in its manufacturing operations (assume 50 operating weeks per year). The lime is purchased from the supplier at a cost of $0.10 per pound. The inventory holding cost is 30 percent of the average value of the inventory, and the cost of placing an order for replenishment is estimated to be $12 per order.
a. Assume that River City orders 10,000 pounds of lime every time it places an order for replenishment. What is the average annual cost of maintaining the inventory?
b. Determine the EOQ. If the forecast of annual demand is 10percent less than actual, how much "extra" is River City paying annually because of an inaccurate forecast of demand (note that this means actual demand for lime averages 220,000 pounds)?
3. Four thrift stores located in one county are cooperating to establish thrift store donation facilities to serve them all. On an xy coordinate grid of the county, the donation facilities are found at the following locations: D1 = (5, 10), D2 = (7,6 ), D3 = (4, 2), and D4 = (16, 3). The expected number of drop offs per month from donators is estimated at 450, 1200, 300, and 1500 pounds respectively. Using the cross-median approach, recommend a location for the blood bank that will minimize the total distance traveled?
4. Discuss the implications of service outsourcing for employees, stockholders, customers, and host-country economy when a firm outsources a call center overseas. How does service outsourcing align or misalign with Tony Hsieh's philosophy at Zappos ?
5. Explain the difference between competitive clustering and saturation marketing. Give examples of a company of each type. Further explain the pros and cons of competitive clustering for customers.