Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 5P
Summary Introduction
To determine: The alternative that would yield lowest total cost for an expected annual volume of 150 boats.
Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.
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Location A would result in annual fixed costs of $300,000 and variable costs of $55 per unit. Annual fixed costs at Location B are $600,000 with variable costs of $32 per unit. Sales volume is estimated to be 30,000 units per year. Which location has the lower cost at this volume? How large is its cost advantage? At what volume are the two facilities equal in cost?
Amazon had planned to open a second headquarters in Brooklyn that would have allegedly added 25,000 jobs to the region, increased property values, generated more business for local store owners, and generated additional sales and income tax revenue
for the government. Some people were concerned, however, that increased home prices could lead to higher rent for people who rented apartments in Brooklyn. Which of the following statements are true?
O Allowing Amazon to locate its second headquarters in Brooklyn is a Pareto improvement (i.e., makes one or more persons better off without making anyone worse off) even if some renters will have to pay higher rent.
O Allowing Amazon to locate its second headquarters in Brooklyn would not be Kaldor-Hicks efficient if some renters will have to pay higher rent.
O Allowing Amazon to locate its second headquarters in Brooklyn is a Kaldor-Hicks improvement if the gain in jobs and tax revenue more than offsets any losses experienced by renters.
O…
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Chapter 8 Solutions
Operations Management
Ch. 8.6 - Prob. 1RQCh. 8.6 - Prob. 2RQCh. 8 - Prob. 1DRQCh. 8 - Prob. 2DRQCh. 8 - Prob. 3DRQCh. 8 - Prob. 4DRQCh. 8 - Prob. 5DRQCh. 8 - Prob. 6DRQCh. 8 - Prob. 7DRQCh. 8 - Prob. 8DRQ
Ch. 8 - Prob. 9DRQCh. 8 - Prob. 1TSCh. 8 - Prob. 2TSCh. 8 - Prob. 3TSCh. 8 - Prob. 1CTECh. 8 - Prob. 2CTECh. 8 - Prob. 3CTECh. 8 - Prob. 4CTECh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 1CQ
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