OPERATIONS MANAGEMENT >C<
14th Edition
ISBN: 9781307701432
Author: Stevenson
Publisher: MCG/CREATE
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Chapter 8, Problem 6P
Summary Introduction
To determine: The alternative that yields the lowest total cost for expected volume of 10,000 units.
Introduction: Economic Analysis is an investigation of powers that decide the circulation of rare assets. It gives understanding into how showcases work, and offers strategies for endeavoring to foresee future market conduct because of occasions, patterns, and cycles.
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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.
Total Cost
Memphis _______________
Biloxi _______________
Birmingham _________________
A firm that has recently experienced enormous growth is seeking to lease a small plant
in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the
three locations given the following information: Annual costs for building, equipment,
and administration would be $40,000 for Memphis, $60,000 for Biloxi, and $100,000 for
Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit
in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system
transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the
Birmingham location by $25,000 per year. Expected annual volume is 10,000 units.
6.
Shoeless Joe is a specialty retailer that is deciding where tolocate a new facility. Th e annual fi xed and variable costs for eachpossible site have been estimated as follows:
If demand is expected to be 2000 units, which location is best?
Chapter 8 Solutions
OPERATIONS MANAGEMENT >C<
Ch. 8.3 - Prob. 1RQCh. 8.3 - Prob. 2RQCh. 8.3 - Prob. 3RQCh. 8 - Prob. 1DRQCh. 8 - Prob. 2DRQCh. 8 - Prob. 3DRQCh. 8 - Prob. 4DRQCh. 8 - Prob. 5DRQCh. 8 - Prob. 6DRQCh. 8 - Prob. 7DRQ
Ch. 8 - Prob. 8DRQCh. 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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