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Consider the following information about sites A, B, and C:
Site A B C
FC (annual) $100.000 $120.000 $150.000
VC (per unit) $10 $8 $7
For what range of output would you prefer site A?
Firstly let's find the indifferent points between site A and B
Total cost function of site A = Total cost function of site B
$100,000 + $10 *Q = $120,000 + $8*Q [here Q means indifference quantity]
By solving the above equation,
Q = 10000 units
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- Consider the following information about sites A, B, and C: Site A B C FC (annual) $100.000 $120.000 $150.000 VC (per unit) $10 $8 $7 For what quantity would you be indifferent between selecting site A or site B?Given the capacity planning discussion in the text (see Figure S7.6 ), what approach is being taken by Arnold Palmer Hospital toward matching capacity to demand?Please do not give solution in image format thanku Bob's candle factory is considering three different manufacturing options. Option A uses hand labor with fixed costs of $10,000 and variable costs of $2.75/candle. Option B uses a combination of hand and automation with fixed costs of $15,000 and variable costs of $1.10/candle. Option C is highly automated with fixed costs of $20,000 and variable costs of $0.75/candle. a. If demand for Bob's candles is 2500, which option should he pick, and what is the cost? b. If demand for Bob's candles is 4500 which option should he pick, and what is the cost?
- Using the information from Module 7 Problem 1 Part A: Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $63,000, and for proposal B, $27,000. The variable cost for A is $12, and for B, $15. The revenue generated by each unit is $19. At an expected volume of 6,700 units, which alternative should be chosen? Be sure to show your work.What is done if there is an unbalanced between demand and capacity?Production and sales estimates for March for Robin Co. are as follows: Estimated inventory (units), March 1 18,000 Desired inventory (units), March 31 21,600 Expected sales volume (units): Territory M 7,000 Territory L 8,000 Territory O 9,000 Unit sales price P15 The number of units expected to be manufactured in March is _______________________________________________ Show solution.