In question1, the monthly demand of product XY increases when comparing between each same month of year1, year2, year3

and has a tendency to grow more. From this study, the company should enlarge the production in return. The next step is to select the best location to construct a new plant, there are four alternatives: Binh Duong (BI), Dong Nai (D), Ba Ria (BA) and HCM City (H). Statistical data from famous companies stresses four main factors including Land cost, Government supports, Labor resources and Transportation system as strongly related keys to succeed in constructing an effective plant. Tax and Policies are two sub-factors of Government supports. Cost and Availability are two sub-factors of Labor resources. Because of the number and the differences in scale of industrial zones in South East of Vietnam, it is impossible to conduct an investigation covering every industrial zone there. Instead, we pick four typical industrial zones from four provinces and city and conduct a research based on these ones. Four industrial zones include My Phuoc in Binh Duong, Nhon Trach II in Dong Nai, Phu My I in Ba Ria and Tan Tao in HCM city.

MY PHUOC INDUSTRIAL CITY BECAMEX IDC CORPORATION

http://www.becamexisc.com.vn/web/xemtin.php?id_tintuc=118 It is about 30 km away from financial and commercial center of HCM city, 32 km away from Tan Cang and 42 km away from Saigon Port and Tan Son Nhat International Airport. Land price and rent (Tenure : 50 years)

Land rent of USD 35-45/sqm

Ready built USD 3 - 4.5/sqm/month factories Rental Utility (electricity, water, telecommunication) are contracted directly with the authorized suppliers/agencies at prevailing rates. Connection points are installed up to the boundary of the leased land lot with no connection fees.

Utility costs

NHON TRACH II INDUSTRIAL ZONE

http://www.diaocvietonline.vn It is located in Nhon Trach suburban district and 44 km away from financial and commercial center of Hochiminh City. There are Long Thanh Airport at a distance of 7 km and Tan Son Nhat International Airport at a longer distance about 40 km. This zone is about 60 km away from Vungtau Port. Leasing price for 50 years is $35/ m2 and needs to be paid at one time 15 days after signing a contract.

PHU MY I INDUSTRIAL ZONE

http://banqlkcn.baria-vungtau.gov.vn This zone is nearby Vungtau Port. Enterprises in fields of electricity, steel, fertilizer, chemical and heavy industry are encouraged to invest there. Leasing price for 50 years at the zone is $70/ m2 and able to be paid at two times, the minimun percentage which needs to be paid at each time is 50% total value of a contract.

TAN TAO INDUSTRIAL ZONE

http://viipip.com It is 12 km away from financial and commercial center of HCM city. It is also about 12 km far away to go to Saigon Rainway Station and 15 km for Tan Son Nhat International Airport.

LABOR COST: According to decree70/2011/N-CP, minimum level of salary for regions is adjusted to increase of prices generally. Particularly, the minimum level of salary in HCM city is 2 million VND/ person/ month. The salary for labour in Binh Duong, Dong Nai, Ba Ria is not less than 1.78 million VND/ person/ month.

After studying the above information, we have: Land Cost: BI, D = 0.9, BA = 0.6, H = 0.1 Results in tax: BI, D, = 0.7, BA = 0.6, H = 0.3 Results in policies: BI, D = 0.8, BA = 0.4, H = 0.6 Results in labor cost: Binh Duong, Dong Nai, Ba Ria = 0.8, HCM = 0.5. Results in labor availability: BI: 0.7, D: 0.8, BA: 0.5, H: 0.9 Transportation Systems: BI = 0.7, D = 0.6, BA = 0.7, H = 0.9 STEP 0: CONSTRUCTION OF HIERARCHY STRUCTURE We construct a Hierarchy Structure as below:

STEP 1: PAIRWISE COMPARISON Labour resouces is determinant of direct costs to produce a product, and hence it is the most important factor. Transportation Systems is slightly lesser important than labour resources. Government Supports is weakly more important than Land cost and Labour resources is very strongly more important than Land cost.

STEP 2: ENTERING VALUE OF ALTERNATIVES

STEP 3: MAKING DECISION Total Column: Binh Duong: 0.748 Dong Nai: 0.730 Ba Ria: 0.663 HCM City: 0.653

SOLUTION FOR CHOOSING THE BEST LOCATION:

The best location for ABC new plant is in My Phuoc Industrial City, Binh Duong.