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In Myanmar, five laborers, each making the equivalent of $3.50 per day, can produce 40 units per day. In China, nine laborers, each making the equivalent of $2.25 per day, can produce 45 units. In Billings, Montana, four laborers, each making $57.00 per day, can make 105 units. Shipping cost from Myanmar to Denver, Colorado, the final destination, is $1.75 per unit. Shipping cost from China to Denver is $1.20 per unit, while the shipping cost from Billings, Montana to Denver is $0.20 per unit. Based on total costs (labor and transportation) per unit, the most economical location to produce the item is , with a total cost (labor and transportation) per unit of $. (Enter your response rounded to two decimal places.)

In Myanmar, five laborers, each making the equivalent of $3.50 per day, can produce 40 units per day. In China, nine laborers, each making the equivalent of $2.25 per day, can produce 45 units. In Billings, Montana, four laborers, each making $57.00 per day, can make 105 units. Shipping cost from Myanmar to Denver, Colorado, the final destination, is $1.75 per unit. Shipping cost from China to Denver is $1.20 per unit, while the shipping cost from Billings, Montana to Denver is $0.20 per unit. Based on total costs (labor and transportation) per unit, the most economical location to produce the item is , with a total cost (labor and transportation) per unit of $. (Enter your response rounded to two decimal places.)

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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### Cost Analysis for Production and Shipping #### Labor Costs and Production Output 1. **Myanmar:** - Number of laborers: 5 - Daily wage per laborer: $3.50 - Total daily labor cost: \(5 \times 3.50 = $17.50\) - Daily production: 40 units 2. **China:** - Number of laborers: 9 - Daily wage per laborer: $2.25 - Total daily labor cost: \(9 \times 2.25 = $20.25\) - Daily production: 45 units 3. **Billings, Montana:** - Number of laborers: 4 - Daily wage per laborer: $57.00 - Total daily labor cost: \(4 \times 57.00 = $228.00\) - Daily production: 105 units #### Shipping Costs - **Myanmar to Denver, Colorado:** $1.75 per unit - **China to Denver, Colorado:** $1.20 per unit - **Billings, Montana to Denver, Colorado:** $0.20 per unit #### Determining the Most Economical Production Location To determine the most economical location to produce the item, calculate the total cost (labor and transportation) per unit for each location: 1. **Myanmar:** - Labor cost per unit: \( \frac{17.50}{40} = $0.44 \) - Total cost per unit: \( 0.44 + 1.75 = $2.19 \) 2. **China:** - Labor cost per unit: \( \frac{20.25}{45} = $0.45 \) - Total cost per unit: \( 0.45 + 1.20 = $1.65 \) 3. **Billings, Montana:** - Labor cost per unit: \( \frac{228.00}{105} = $2.17 \) - Total cost per unit: \( 2.17 + 0.20 = $2.37 \) #### Conclusion Based on total costs (labor and transportation) per unit, the most economical location to produce the item is **China**, with a total cost (labor and transportation) per unit of **$1.65**. Note: All
Transcribed Image Text:### Cost Analysis for Production and Shipping #### Labor Costs and Production Output 1. **Myanmar:** - Number of laborers: 5 - Daily wage per laborer: $3.50 - Total daily labor cost: \(5 \times 3.50 = $17.50\) - Daily production: 40 units 2. **China:** - Number of laborers: 9 - Daily wage per laborer: $2.25 - Total daily labor cost: \(9 \times 2.25 = $20.25\) - Daily production: 45 units 3. **Billings, Montana:** - Number of laborers: 4 - Daily wage per laborer: $57.00 - Total daily labor cost: \(4 \times 57.00 = $228.00\) - Daily production: 105 units #### Shipping Costs - **Myanmar to Denver, Colorado:** $1.75 per unit - **China to Denver, Colorado:** $1.20 per unit - **Billings, Montana to Denver, Colorado:** $0.20 per unit #### Determining the Most Economical Production Location To determine the most economical location to produce the item, calculate the total cost (labor and transportation) per unit for each location: 1. **Myanmar:** - Labor cost per unit: \( \frac{17.50}{40} = $0.44 \) - Total cost per unit: \( 0.44 + 1.75 = $2.19 \) 2. **China:** - Labor cost per unit: \( \frac{20.25}{45} = $0.45 \) - Total cost per unit: \( 0.45 + 1.20 = $1.65 \) 3. **Billings, Montana:** - Labor cost per unit: \( \frac{228.00}{105} = $2.17 \) - Total cost per unit: \( 2.17 + 0.20 = $2.37 \) #### Conclusion Based on total costs (labor and transportation) per unit, the most economical location to produce the item is **China**, with a total cost (labor and transportation) per unit of **$1.65**. Note: All
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