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A small printing firm is about to lose its lease. So it must move to another location. Two sites are currently under consideration. Site A would have fixed costs of $8,000 per month, and site B would have fixed costs of $9,400 per month. Variable costs are expected to be $5 per unit at site A and $4 per unit at site B. Monthly demand has been steady at 8,800 units for the last several years and is not expected to deviate from that amount in the foreseeable future. Assume units sell for $6 per unit. Determine which location would yield the higher profit under these conditions. 32.

A small printing firm is about to lose its lease. So it must move to another location. Two sites are currently under consideration. Site A would have fixed costs of $8,000 per month, and site B would have fixed costs of $9,400 per month. Variable costs are expected to be $5 per unit at site A and $4 per unit at site B. Monthly demand has been steady at 8,800 units for the last several years and is not expected to deviate from that amount in the foreseeable future. Assume units sell for $6 per unit. Determine which location would yield the higher profit under these conditions. 32.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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11:28 M A 0.58 4G VOLTE 1 3 KB/S QB_Ind Engg_Revised... 5 UNIT-2: FACILITY LOCATION & LAYOUT 30. Fixed and variable costs for four potential plant locations are shown below: LOATION FIXED COST($)/YEAR VARIABLE COST($)/UNIT A 250,000 11 В 110,000 30 C 150,000 20 D 200,000 35 a. Plot the total-cost lines for these locations on a single graph. b. Identify the range of output for which each alternative is superior. c. If the expected output at the selected location is to be 8,000 units/year, which location would provide the lowest total cost? A farm implements dealer is seeking a fourth warehouse location to complement three existing warehouses. There are three potential Ilocations: Charlotte, Atlanta and Columbia. Charlotte would involve a fixed cost of $4000/month & a variable cost of $4/unit; Atlanta would involve a fixed cost of $3500/month & a variable cost of $5/unit & Columbia would involve a fixed cost of $5000/month & a variable cost of $6/unit. Use of Charlotte location would increase system transportation cost by $19,000/month, Atlanta location would add $22,000/month and Columbia location would add $18,000/month to transportation costs. Which location would result in the lowest total cost to handle 800 units per month? 31. A small printing firm is about to lose its lease. So it must move to another location. Two sites are currently under consideration. Site A would have fixed costs of $8,000 per month, and site B would have fixed costs of $9,400 per month. Variable costs are expected to be $5 per unit at site A and $4 per unit at site B. Monthly demand has been steady at 8,800 units for the last several years and is not expected to deviate from that amount in the foreseeable future. Assume units sellI for $6 per unit. Determine which location would yield the higher profit under these conditions. 32. A small manufacturing firm has recently decided to expand its operations to include several new lines, which it hopes to produce in a separate location because of space limitations in its existing plant. The following rating sheet illustrates relevant factors, factor weightings, and actual ratings for two alternative locations. Find out which location alternative should be chosen on the basis of maximum composite score. 33. Score out of 100 Alt 1 Factor Weight Alt 2 Nearness to Raw Materials 0.10 100 60 Labor Cost 0.05 80 80 Water Supply 0.40 70 90 Transportation costs 0.10 86 92 Climate 0.20 40 70 Таxes 0.15 80 90 A manager has received an analysis of several cities being considered for a new office complex. The data (10 points maximum) are: 34. Location Factor A В Business services 9. Community services 7 6. 7 Real estate cost 8 7 Construction costs 6. Cost of Living 4 7 8 Taxes 5 4 Transportation 7 8.
Transcribed Image Text:11:28 M A 0.58 4G VOLTE 1 3 KB/S QB_Ind Engg_Revised... 5 UNIT-2: FACILITY LOCATION & LAYOUT 30. Fixed and variable costs for four potential plant locations are shown below: LOATION FIXED COST($)/YEAR VARIABLE COST($)/UNIT A 250,000 11 В 110,000 30 C 150,000 20 D 200,000 35 a. Plot the total-cost lines for these locations on a single graph. b. Identify the range of output for which each alternative is superior. c. If the expected output at the selected location is to be 8,000 units/year, which location would provide the lowest total cost? A farm implements dealer is seeking a fourth warehouse location to complement three existing warehouses. There are three potential Ilocations: Charlotte, Atlanta and Columbia. Charlotte would involve a fixed cost of $4000/month & a variable cost of $4/unit; Atlanta would involve a fixed cost of $3500/month & a variable cost of $5/unit & Columbia would involve a fixed cost of $5000/month & a variable cost of $6/unit. Use of Charlotte location would increase system transportation cost by $19,000/month, Atlanta location would add $22,000/month and Columbia location would add $18,000/month to transportation costs. Which location would result in the lowest total cost to handle 800 units per month? 31. A small printing firm is about to lose its lease. So it must move to another location. Two sites are currently under consideration. Site A would have fixed costs of $8,000 per month, and site B would have fixed costs of $9,400 per month. Variable costs are expected to be $5 per unit at site A and $4 per unit at site B. Monthly demand has been steady at 8,800 units for the last several years and is not expected to deviate from that amount in the foreseeable future. Assume units sellI for $6 per unit. Determine which location would yield the higher profit under these conditions. 32. A small manufacturing firm has recently decided to expand its operations to include several new lines, which it hopes to produce in a separate location because of space limitations in its existing plant. The following rating sheet illustrates relevant factors, factor weightings, and actual ratings for two alternative locations. Find out which location alternative should be chosen on the basis of maximum composite score. 33. Score out of 100 Alt 1 Factor Weight Alt 2 Nearness to Raw Materials 0.10 100 60 Labor Cost 0.05 80 80 Water Supply 0.40 70 90 Transportation costs 0.10 86 92 Climate 0.20 40 70 Таxes 0.15 80 90 A manager has received an analysis of several cities being considered for a new office complex. The data (10 points maximum) are: 34. Location Factor A В Business services 9. Community services 7 6. 7 Real estate cost 8 7 Construction costs 6. Cost of Living 4 7 8 Taxes 5 4 Transportation 7 8.
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