PRIN.OF OPERATIONS MANAGEMENT-MYOMLAB
PRIN.OF OPERATIONS MANAGEMENT-MYOMLAB
11th Edition
ISBN: 9780135226742
Author: HEIZER
Publisher: PEARSON
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Chapter 8, Problem 18P

a)

Summary Introduction

To determine :The volumes at which site C is the most cost effective.

Introduction: Location is one of the important element for a business that controls the cost and expenses. Location strategies support in framing other strategies for a firm where optimal location point will provide competitive advantage to a firm.

b)

Summary Introduction

To determine : The volume at which site A is optimal.

c)

Summary Introduction

To determine : The volume at which site B is optimal.

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TATA Motors is considering three sites - A, B, and C - at which to locate a factory to build its new-model automobile, the TATA SUV XL500. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable cost of production. TATA Motors has gathered the following data:   Site      Annualized Fixed Cost              Variable Cost per Auto Produced A                     $11,000,000                                          $2,000 B                      $20,000,000                                          $1,400 C                      $27,000,000                                          $550   The firm knows it will produce between 0 and 60,000 SUV XL500s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans. Find the range of the production volume for which a)site A is optimal. b)site B is optimal. c)site C is optimal.
Hyundai Motors is considering three sites-A, B, and C-at which to locate a factory to build its new-model automobile, the Hyundai Sport C150. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data: Site Annualized Fixed Cost Variable Cost per Auto Produced A $2,400 B $11,000,000 $20,000,000 $30,000,000 $2,100 C $1,000 The firm knows it will produce between 0 and 60,000 Sport C150s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans.
Hyundai Motors is considering three sites—​A, ​B, and C—at which to locate a factory to build its​ new-model automobile, the Hyundai Sport C150. The goal is to locate at a​ minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following​ data:                                                                                                     Site Annualized Fixed Cost Variable Cost per Auto Produced A $10,000,000   $2,600   B $20,000,000   $1,900   C $30,000,000   $1,100     The firm knows it will produce between 0 and​ 60,000 Sport C150s at the new plant each​ year, but, thus​ far, that is the extent of its knowledge about production plans. ​a) The value of​ volume, V, of production above which site C is recommended​ = nothing Sport C150s ​(round your response up to the next whole​ number). ​b) The value of​ volume, V, of production below which site A is…
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