A Plant at place G ships through a single warehouse to a number of markets at 1,2,3,4 and 5.

It is projected
that over time demand will increase and shift westward. The COG locations for each year in the next five
years are shown as points A, B, C, D & E. The profits, discounted to the present associated with each of
these best locations are given in Table 1.
In addition the discounted profits associated with locating in each of the other locations throughout the five
years are also given.
We know that it requires $100,000 to move from one another in any year. The cost of capital is 20% per
year.
 Location 1 Ye ar from pre 3 sent 5
Alternatives 194000 2 623200 4 1336000
ABCDE 176500 356100 743400 671100 1398200
d Discounted P 172300 372000 836400 750000 1457600
ximum profits al 166700 344700 756100 862200 1486600
159400 337600 715500 973300 1526000
rofits for 303400 n in each ye 892800 ning horizon
ong with each locatio gonal. r of the plan
the main dia

Project
e with
ma
a
A 1 A 2 A 3 C 4 D 5 E
B P B P B P C P D P E
C 3719086 C 3525086 C 3168986 C 2402030 D 1477775 E
D 3717486 D 3540986 D 3168986 D 2402030 D 1477775 D
E 3755430 E 3583130 C 3283430 C 2402030 E 1477775 E
3720300 3553600 3216000 2459900 1486600
3659197 3499797 3168986 2418800 1526000