An operations manager has narrowed down the search for a new factory to three locations. The fixed and variable costs associated with each location are given in Table 3below.Table 3Location Fixed Cost Variable CostA $100,000 $10B $150,000 $7C $200,000 $5i. Write an equation for the total costs of each location. ii. Calculate the point where the costs lines intersect. iii. Over which volume of output is each location preferred based on costs
An operations manager has narrowed down the search for a new factory to three locations. The fixed and variable costs associated with each location are given in Table 3below.Table 3Location Fixed Cost Variable CostA $100,000 $10B $150,000 $7C $200,000 $5i. Write an equation for the total costs of each location. ii. Calculate the point where the costs lines intersect. iii. Over which volume of output is each location preferred based on costs
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter6: Optimization Models With Integer Variables
Section: Chapter Questions
Problem 100P
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Question
An operations manager has narrowed down the search for a new factory to three
locations. The fixed and variable costs associated with each location are given in Table 3
below.
Table 3
Location Fixed Cost Variable Cost
A $100,000 $10
B $150,000 $7
C $200,000 $5
i. Write an equation for the total costs of each location.
ii. Calculate the point where the costs lines intersect.
iii. Over which volume of output is each location preferred based on costs
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