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Operations Management
Fixed Costs Variable Manufacturing Variable Shipping Costs per Unit per Year Costs per Unit Phoenix $300,000 $70.00 $5.00 Buffalo $600,000 $56.00 $4.00 Seattle $1,500,000 $36.00 $2.00 Atlanta $1,750,000 $42.00 $5.00

Fixed Costs Variable Manufacturing Variable Shipping Costs per Unit per Year Costs per Unit Phoenix $300,000 $70.00 $5.00 Buffalo $600,000 $56.00 $4.00 Seattle $1,500,000 $36.00 $2.00 Atlanta $1,750,000 $42.00 $5.00

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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Question

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:

a. Use break-even point analysis to determine where Den-
nison should locate.
b. Based solely on break-even quantity, if Dennison’s manu-
facturing forecast for the foreseeable future is 40,000 units
annually, where should he locate?

Fixed Costs Variable Manufacturing Variable Shipping Costs per Unit per Year Costs per Unit Phoenix $300,000 $70.00 $5.00 Buffalo $600,000 $56.00 $4.00 Seattle $1,500,000 $36.00 $2.00 Atlanta $1,750,000 $42.00 $5.00
Transcribed Image Text:Fixed Costs Variable Manufacturing Variable Shipping Costs per Unit per Year Costs per Unit Phoenix $300,000 $70.00 $5.00 Buffalo $600,000 $56.00 $4.00 Seattle $1,500,000 $36.00 $2.00 Atlanta $1,750,000 $42.00 $5.00
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