Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
11th Edition
ISBN: 9780135639221
Author: Jay Heizer, Barry Render
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…
Chapter 8 Solutions
Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
Ch. 8 - Prob. 1EDCh. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQ
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