Activity 1: In your own words, explain the problem that is being addressed in this case study. In other words, what is the case study about? Activity 2: If you were to weight the twelve decision criteria presented in Figure 5 by using a 1-10 weighting scale, what weight would you have assigned to each criterion? Why? Activity 3: The boutique hotel company is interested in the cost that varies with guests’ distance from hotels (See c from the warehouse area model). Using the Warehouse Area model and following the instructions below, answer the following questions (in addition to answering the questions, you need to provide a detailed explanation as to how you solved the question and calculated the response): What is the area (in the squared mile) that the company intended to serve with the Boutique Hotel? What is the sales density per square mile (in $)? What is the varying cost based on the distance from the hotel (in $)? What is the varying cost based on the distance from the hotel for a customer traveling from Raleigh (in ?)? What are the interpretations/implications of “the varying cost based on the distance” in a restaurant or hotel business? Instructions: You need to extract the total fixed charges and total undistributed operating expenses information from Figure 12, the local revenues/expenses table, and then sum them up to have the fixed cost for the boutique hotel. Use the direct line distance between New Bern, NC and Kinston, NC as the radius in order to calculate the coverage area of the boutique hotel (Note 1: Consider an arbitrary point in the middle of these two towns as the start- and end- points of your radius measurement. Note 2: You can calculate the coverage area by using circle’s area formula). You need to extract the total revenues information from Figure 12, the local revenues/expenses table; and then divide it by the coverage area to have the sales density per square mile in $. You need to solve the warehouse area equation for c (., the cost that varies based on distance from business) and then plug in the numbers. To calculate the value of c for Raleigh, you need to find the shortest driving distance between Raleigh and New Bern (Note: driving distance is not the same as the direct line distance we used in the second instruction (B)). Activity 4: Assume that the boutique hotel company targets five urban areas in NC to establish new hotels. They also need a central warehouse to supply/provide for all five locations. Based on the demands for the warehouse from each of these five locations and by using the center of gravity model, propose a location for the warehouse by answering the following questions (in addition to answering the questions, you need to provide a detailed explanation as to how you solved the question and calculated the answer): What is the weighted coordination of the warehouse on the Cartesian coordination system (., x and y)? What is the coordination of the best place for the warehouse (., latitude and longitude)? Where is this location on the map? What is the closest city to the warehouse? Which of the five locations are the closest to the warehouse (both direct line distance-wise and driving distance-wise)? What is the interpretation of your solution? In other words, why should the location you have selected be considered as the best location for the warehouse? Elaborate on your response. Demand from the five locations: New Bern: $89,873 Greenville: $102,500 Wilmington: $612,000 Fayetteville: $164,286 Raleigh: $528,322
