A firm is considering three different locations in which to build a factory. The costs associated with each location are given below. Location A B C Fixed Costs 500 700 900 Variable costs per unit 10 6 4 Plot the crossover chart for the locations. What level of output will each location be preferred? Write an equation to represent the costs for each location.
A firm is considering three different locations in which to build a factory. The costs associated with each location are given below. Location A B C Fixed Costs 500 700 900 Variable costs per unit 10 6 4 Plot the crossover chart for the locations. What level of output will each location be preferred? Write an equation to represent the costs for each location.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter6: Optimization Models With Integer Variables
Section: Chapter Questions
Problem 100P
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Question
A firm is considering three different locations in which to build a factory. The costs associated with each location are given below.
Location | A | B | C |
Fixed Costs | 500 | 700 | 900 |
Variable costs per unit | 10 | 6 | 4 |
- Plot the crossover chart for the locations.
- What level of output will each location be preferred?
- Write an equation to represent the costs for each location.
- Use algebra to determine the crossover points.
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