Aalogistics Co. has just signed a contract to deliver products to three locations, and they are trying to decide where to put their new warehouse. The three delivery locations are Chicago, Kansas City, and Memphis. The two potential sites for the warehouse are Peoria and St. Louis. The x, y coordinates for the delivery locations and warehouses are as follows:
The total quantity to be delivered to each destination is: 400 to Chicago, 150 to Kansas City, and 100 to Memphis.
(a) Calculate the total load-distance value from each potential warehouse location.
(b) Where should the new warehouse be located?
Definitions:
FIFO Method
An inventory valuation method that assumes the first items placed in inventory are the first sold.
Conversion Costs
The costs incurred in the process of converting raw materials into finished goods, including direct labor and manufacturing overhead expenses.
FIFO Method
A method of inventory valuation where the first items purchased or produced are the first ones sold, used in costing inventory.
Conversion Costs
The combined expenses of direct labor and manufacturing overheads incurred in transforming raw materials into finished goods.
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