If facilities have lower fixed costs a. a few high-capacity facilities are preferred because this helps lower transportation costs. b. a few local facilities are preferred because this helps lower transportation costs. c. many high-capacity facilities are preferred because this helps lower transportation costs. d. many local facilities are preferred because this helps lower transportation costs.

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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If facilities have lower fixed costs?
### Facility and Transportation Cost Management

**Question:** If facilities have lower fixed costs, which option helps lower transportation costs?

a. A few high-capacity facilities are preferred because this helps lower transportation costs.

b. A few local facilities are preferred because this helps lower transportation costs.

c. Many high-capacity facilities are preferred because this helps lower transportation costs.

d. Many local facilities are preferred because this helps lower transportation costs.

---

### Explanation:

This exercise explores the relationship between facility location, size, and transportation cost efficiency. Choosing the right option involves balancing fixed costs of facilities with the goal of reducing transportation expenses. Consider the advantages of centralizing versus decentralizing facilities and how they impact overall transportation logistics.
Transcribed Image Text:### Facility and Transportation Cost Management **Question:** If facilities have lower fixed costs, which option helps lower transportation costs? a. A few high-capacity facilities are preferred because this helps lower transportation costs. b. A few local facilities are preferred because this helps lower transportation costs. c. Many high-capacity facilities are preferred because this helps lower transportation costs. d. Many local facilities are preferred because this helps lower transportation costs. --- ### Explanation: This exercise explores the relationship between facility location, size, and transportation cost efficiency. Choosing the right option involves balancing fixed costs of facilities with the goal of reducing transportation expenses. Consider the advantages of centralizing versus decentralizing facilities and how they impact overall transportation logistics.
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