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Need help please show formula how to solve please. Thanks A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs that locating near the market, but the owner believes that there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $180 in either case. Using the following information, determine which location would produce greater profit.

Need help please show formula how to solve please. Thanks A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs that locating near the market, but the owner believes that there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $180 in either case. Using the following information, determine which location would produce greater profit.

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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Need help please show formula how to solve please. Thanks

A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs that locating near the market, but the owner believes that there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $180 in either case. Using the following information, determine which location would produce greater profit.

Annual fixed costs ($ millions) ........ Variable cost per unit ....... Expected annual demand (units)..... Near Raw Materials $1.2 $36 8,000 Near Customers $1.4 $47 12,000
Transcribed Image Text:Annual fixed costs ($ millions) ........ Variable cost per unit ....... Expected annual demand (units)..... Near Raw Materials $1.2 $36 8,000 Near Customers $1.4 $47 12,000
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