Porta-Putt, Inc.
Porta-Putt, Inc., manufactures and distributes gasoline-powered outboard motors for
boats, One of their three assembly plants, the St. Louis plant, is obsolete. The Los
Angeles and Chicago assembly plants were recently renovated. Rather than continue
peration in St. Louis, management is considering a new location forthe third plant.
This is an opportune time, because in two years the new Denver distribution warchouse
Till be opened. Since the new assembly plant could be the primary supplier of motors
withe Denver warehouse, the new plant could be located to minimize shipping costs,
shich are a substantial part of Porta-Putt’s operating costs.
"two types of shipping costs are incurred at the St. Louis plant. First, raw
materials and subcomponents arc shipped ftom Minneapolis and Seatdle to the St.
Louis facility. Then, after final assembly, the St. Louis plant ships the finished motors
Uathe Denver distribution warchouse. Figure 6.5 shows the locations of the three
Teallities chat ship toot from the St. Louis facility. Table 6.5 summarizes the annual
racer of loads shipped between St. Louis and each of the other three sites. The cost
Of shipping a load is estimated to be 8.10/mile,
Management would lke to ind a location that would minimize the potentially
high annual transportation costs. Ar the sme time, however, there is some hesitation
are cmoving away from metropolitan St, Louis, the original assembly plant established
$e years ago. Porta-Putt’ experienced work force has survived many work methods and
Sesembly line changes. From these refinements evolved an intricate assembly operation
thar effeiently produced quality motors—until recently, when the plant becameTABLE 6.5 Loads between the St. Louis plant and shipping facilities for Porta
Putt
Annual ‘Coordinate location (x, 9)
Shipping Loads Between F; of F,
Facility F and St, Louis (5,9)
Denver 10,000 (1,000, $50)
Seattle 8,000 (100, 1,100)
Minneapolis 4,000 (1,600, 900)