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Question 1  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.

Question 1  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.

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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Question 1 

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

 

 

  1. Plot the crossover chart for the locations.
  2. What level of output will each location be preferred?
  3. Write an equation to represent the costs for each location.
  4. Use algebra to determine the crossover points.
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