The EU has made changes in airline regulation that dramatically affect major European carriers such as British International Air (BIA), KLM, Air France, Alitalia, and Swiss International Air. With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to complement its large Heathrow (London) repair facility. The location selection is critical, and with the potential for 4,000 new skilled blue-collar jobs on the line, virtually every city in western Europe is actively bidding for BIA's business. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Each is then rated on 12 factors, as shown in the table below.
|
Location |
|
|
Italy |
France |
Germany |
| Factor |
Important weight |
Milan |
Rome |
Genoa |
Paris |
Lyon |
Nice |
Munich |
Bonn |
Berlin |
| Financial incentives |
85 |
8 |
8 |
8 |
7 |
7 |
7 |
7 |
7 |
7 |
| Skilled labor pool |
ao |
4 |
6 |
5 |
9 |
9 |
7 |
10 |
8 |
9 |
| Existing facility |
70 |
5 |
3 |
2 |
9 |
6 |
5 |
9 |
9 |
2 |
| Wage rates |
70 |
9 |
8 |
9 |
4 |
6 |
6 |
4 |
5 |
5 |
| Competition for jobs |
70 |
7 |
3 |
8 |
2 |
8 |
7 |
4 |
8 |
9 |
| Ease of at traffic access |
65 |
5 |
4 |
6 |
2 |
8 |
8 |
4 |
8 |
9 |
| Real estate cost |
40 |
6 |
4 |
7 |
4 |
6 |
6 |
3 |
4 |
5 |
| Communication links |
25 |
6 |
7 |
6 |
9 |
9 |
9 |
10 |
9 |
8 |
| Attractiveness to relocating executives |
15 |
4 |
8 |
3 |
9 |
6 |
6 |
2 |
3 |
3 |
| Political considerations |
10 |
6 |
6 |
6 |
8 |
8 |
8 |
8 |
8 |
8 |
| Expansion possblities |
10 |
10 |
2 |
8 |
1 |
5 |
4 |
4 |
5 |
6 |
| Union strength |
10 |
1 |
1 |
1 |
5 |
s |
5 |
6 |
6 |
6 |
a) Help Miller rank the top three cities that BIA should consider as its new site for servicing aircraft.
b) After further investigation, Miller decides that an existing set of hangar facilities for repairs is not nearly as important as earlier thought. If he lowers the weight of that factor to 30, does the ranking change?
c) After Miller makes the change in part (b), Germany announces it has reconsidered its offer of financial incentives, with an additional 200-million-euro package to entice BIA. Accordingly, BIA has raised Germany's rating to 10 on that factor. Is there any change in top rankings in part (b)?