Lower utilization

Lower utilization.

1. What is the annual cost of serving the entire nation from Chicago? 2. Do you recommend adding any plant(S)? if so, where should the plant(S) be build and what lines should be included? Assume that the Chicago plant will be maintained at its current capacity but could be run at lower utilization. Would your decision be different if transportation costs are half of their current value? What if they were double their current value? 3. If Johnson could design a new network from scratch (assume he did not have the Chicago plant but could build it at the cost and capacity specified in the case). What production network would you recommend? Assume that any new plants built beside Chicago would be at the cost and capacity specified under the new network options. Would your decision be different in transportation costs were half of their current value? What if they were double their current value?

Lower utilization

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