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OPS MGMT - American International Automotive Industries (AIAI)




Question;American International Automotive Industries (AIAI) manufactures auto and truck engine,transmission, and chassis parts for manufacturers and repair companies in the United States,South America, Canada, Mexico, Asia, and Europe. The company transports to its foreignmarkets by container ships. To serve its customers in South America and Asia, AIAI has largewarehouse/distribution centers. In Europe it ships into Hamburg and Gdansk, where it hascontracted with independent distribution companies to deliver its products to customersthroughout Europe. However, AIAI has been displeased with a recent history of late deliveriesand rough handling of its products. For a time AIAI was not overly concerned since its Europeanmarket wasn't too big and its European customers didn't complain. In addition, it had morepressing supply chain problems elsewhere. In the past five years, since trade barriers havefallen in Europe and Eastern European markets have opened up, its Europeans business hasexpanded, as has new competition, and its customers have become more demanding andquality conscious. As a result, AIAI has initiated the process to select a site for a new Europeanwarehouse/distribution center. Although it provides parts to a number of smaller truck and automaintenance and service centers in Europe, it has seven major customersauto and truckmanufacturersin Vienna, Leipzig, Budapest, Prague, Krakow, Munich, and Frankfurt. Itscustomers in Vienna and Budapest have adopted manufacturing processes requiringcontinuous replenishment of parts and materials.AIAI's European headquarters is in Hamburg. The vice-president for construction anddevelopment in Dayton, Ohio, has asked the Hamburg office to do a preliminary site searchbased on location, geography, transportation, proximity to customers, and costs. The Hamburgoffice has identified five potential sites in Dresden, Lodz, Hamburg, Gdansk, and Frankfurt. TheHamburg office has forwarded information about each of these sites to corporate headquarters,including forecasts of the number of containers shipped annually to each customer as follows:Vienna, 160, Leipzig, 100, Budapest, 180, Prague, 210, Krakow, 90, Munich, 120, andFrankfurt, 50. When the vice-president of construction in Dayton received this information, hepulled out his map of Europe and began to study the sites.Assist AIAI with its site selection process in Europe. Recommend a site form the fivepossibilities, and indicate what other location factors you might consider in the selectionprocess.Scenario: You are an independent consultant, hired by the Vice President of Construction,American International Automotive Industries (AIAI). Conduct an appropriate quantitativeanalysis and provide the vice president with a decision support paper addressing theissues within the Case Problem.Specific guidance: You are expected to use the quantitative analysis methods within thismodule to arrive at conclusions and provide supported recommendations within yourformal paper. You should select appropriate graphical presentation methodologies topresent this material within the paper. Include all computation materials as appendices tothe completed report.


Paper#45746 | Written in 18-Jul-2015

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