Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its new manufacturing facility to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities: Fixed Costsper Year Variable ManufacturingCosts per Unit Variable ShippingCosts per Unit Phoenix Buffalo Seattle Atlanta $300,000 $600,000 $1,500,000 $1,750,000 $70.00 $56.00 $36.00 $42.00 $5.00 $4.00 $2.00 $5.00 a. Use break-even point analysis to determine where Dennison should locate.b. Based solely on break-even quantity, if Dennison’s manufacturing forecast for the foreseeable future is 40,000 units annually, where should he locate?
Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its new manufacturing facility to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities: Fixed Costsper Year Variable ManufacturingCosts per Unit Variable ShippingCosts per Unit Phoenix Buffalo Seattle Atlanta $300,000 $600,000 $1,500,000 $1,750,000 $70.00 $56.00 $36.00 $42.00 $5.00 $4.00 $2.00 $5.00 a. Use break-even point analysis to determine where Dennison should locate.b. Based solely on break-even quantity, if Dennison’s manufacturing forecast for the foreseeable future is 40,000 units annually, where should he locate?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its new manufacturing facility to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities:
| Fixed Costs per Year |
Variable Manufacturing Costs per Unit |
Variable Shipping Costs per Unit |
|
|
Phoenix Buffalo Seattle Atlanta |
$300,000 $600,000 $1,500,000 $1,750,000 |
$70.00 $56.00 $36.00 $42.00 |
$5.00 $4.00 $2.00 $5.00 |
a. Use break-even point analysis to determine where Dennison should locate.
b. Based solely on break-even quantity, if Dennison’s manufacturing
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