Renault is evaluating the optimal location for a new engine production facility to reduce the high transportation costs between its current engine plant in Bourg-en-Bresse and truck assembly site in Caen.
Two candidate cities -Le Havre and Rennes- are analyzed based on fixed costs, transport distances, and capacity constraints to determine the most cost-effective solution.

The case provides a practical illustration of facility location optimization using cost-based decision criteria under different scenarios including fuel price changes, capacity expansion, and government subsidies.