A manager is looking for a new facility location. The annual fixed costs and variable costs for two alternatives follow. At what level of annual output wouldeach location provide the same total cost?A. 25,000 units per yearB. 12,500 units per yearC. 33,333 units per yearD. 5,000 units per yearLocationABFixed Costs per Year$200,000$250,000Variable Costs per Unit$10.00$6.00

Facility location is the process of determining the optimal location for a facility such as a…

Answered: A manager is looking for a new facility…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Similar questions

How does planning for capacity in service differ from planning for capacity in manufacturing?
Samantha’s Group of Companies is deciding if it should design an advertising system for use on its website. The first option is to skip out on designing, with no net costs or gains. The second option is System A, which would result in additional sales of either $25,000 under good conditions or -$15,000 under bad conditions. The final choice is System B, which would increase sales -$5,000 under both good and bad conditions. Note that it costs $25,000 to develop a system. Assume that good conditions are TWICE as likely as the bad conditions. (Hint: twice as likely means a ratio of 2:1). Outline the ultimate objective for the use of decision trees in product design. How is this objective accomplished? Draw the appropriate decision tree for the above problem.
What is done if there is an unbalanced between demand and capacity?
Define the Process selection and capacity planning influence system design?
The XYZ company has two plants producing "K Specials". It has the following expected data for the next month's operations. Variable (incremental) costs vary linearly from zero production to maximum capacity production. plant A plant B Max. Capacity, units 1,000 800 Total fixed cost 750,000 480,000 Variable (incremental) Costs Max. Capacity 900,000 800,000 Performance has not been good, so the company expects to receive domestic orders for only 1,200 units next month at a price of 1,400 per unit. How should the production be distributed between the plants for optimum economic operation? A. Plant A should produce 800 units and 400 units for Plant B. B. Plant A should produce 1,000 units and 200 units for Plant B. C. Plant A should produce 700 units and 500 units for Plant B. D. Plant A should produce 900 units and 300 units for Plant B.
Evaluate capacity alternatives using decision tree ?
Answer for type B
A likely office location for a group of offices consisting of a Pediatric Dentist, and Orthodontist and a Pediatrician would be: A. a high rise office building in an urban setting. B. a flexible warehouse space. C. All of these are correct. D. a neighborhood office complex.
Please do not give solution in image format thanku Bob's candle factory is considering three different manufacturing options. Option A uses hand labor with fixed costs of $10,000 and variable costs of $2.75/candle. Option B uses a combination of hand and automation with fixed costs of $15,000 and variable costs of $1.10/candle. Option C is highly automated with fixed costs of $20,000 and variable costs of $0.75/candle. a. If demand for Bob's candles is 2500, which option should he pick, and what is the cost? b. If demand for Bob's candles is 4500 which option should he pick, and what is the cost?
Cortez Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $75,000 for proposal B. In addition to the proposed fixed costs from the two ve management at Cortez anticipates that they will have to spend $8,000 for installations be completed. The variable cost is $12.00 for A and $11.00 for B. The revenue generated by each unit is $24.00. a) The break-even point in dollars for the proposal by Vendor A = $ (round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B = $| (round your response to the nearest whole number).
A company has a factory that is designed so that it is most efi cient (average unit cost is minimized) when producing 15,000 units of output each month. However, it has an absolute maximum output capability of 17,250 units per month, and can produce as little as 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 10,925 units in October, what is the capacity utilization rate in October for this factory?
What are demand forecasting and capacity strategy? Give an example of demand forecasting for a business.

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