Answered: Location Fixed Costs Variable Costs A…

Business

Operations Management

Location Fixed Costs Variable Costs A $70,000 $1/unit B $34,000 $5/unit C $20,000 $8/unit $50,000 $4/unit

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

Shoeless Joe is a specialty retailer that is deciding where to
locate a new facility. Th e annual fi xed and variable costs for each
possible site have been estimated as follows:

If demand is expected to be 2000 units, which location is best?

Location
Fixed Costs
Variable Costs
A
$70,000
$1/unit
B
$34,000
$5/unit
C
$20,000
$8/unit
$50,000
$4/unit

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