OPERATIONS MANAGEMENT: SUSTAIN ACCESS C
13th Edition
ISBN: 9780135662076
Author: HEIZER
Publisher: PEARSON
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Question
Chapter 8, Problem 17P
a)
Summary Introduction
To Perform: A volume analysis.
b)
Summary Introduction
To determine: The change in answer.
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Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper
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Dallas
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Detroit
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a) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above 40,000
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B
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C
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D
16,000
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A firm that recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi MS; or Birmingham, AL. Prepare an economic analysis of the three locations giving the following information. Annual costs for building, equipment, and administration would be $64,000 for Memphis, $74,000 for Biloxi, and $109,000 for Birmingham. Labor and materials are expected to be $7 per unit in Memphis, $6 per unit in Biloxi, and $6 per unit in Birmingham. The Memphis location would increase system transportation costs by $63,000 per year, the Biloxi location by $73,500 per year, and the Birmingham location by $25,900 per year. Expected annual volume is 14,900 units.
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Birmingham _________________
Chapter 8 Solutions
OPERATIONS MANAGEMENT: SUSTAIN ACCESS C
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