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ANNUALIZED FIXED COST VARIABLE COST PER AUTO PRODUCED SITE A $10,000,000 $2,500 $20,000,000 $2,000 $25,000,000 $1,000

ANNUALIZED FIXED COST VARIABLE COST PER AUTO PRODUCED SITE A $10,000,000 $2,500 $20,000,000 $2,000 $25,000,000 $1,000

Practical Management Science
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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Hyundai Motors is considering three sites- A, B, and C- at which to locate a factory to build its new-model automobile, the Hyundai Sport CJSO. The goal is to locate at a minimum-cost
si te, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data:                                                                                                            The firm knows it will produce between 0 and 60,000 Sport Cl50s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans.
a) For what values of volume, V, of production, if any, is site C a recommended site?
b) What volume indicates site A is optimal?
c) Over what range of volume is site B optimal? Why?
ANNUALIZED FIXED COST VARIABLE COST PER AUTO PRODUCED SITE A $10,000,000 $2,500 $20,000,000 $2,000 $25,000,000 $1,000
Transcribed Image Text:ANNUALIZED FIXED COST VARIABLE COST PER AUTO PRODUCED SITE A $10,000,000 $2,500 $20,000,000 $2,000 $25,000,000 $1,000
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