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A manufacturing firm is considering 2 locations for the plant to manufacture a new product. The two locations have fixed and variable costs as follows:

Site Fixed Cost (Annual)

Variable Cost (per unit)

A $100,000

$10

B $120,000

$8

C $150,000

$7

a) For what quantity would there be unresponsive between selecting site A or site B?

b) For what range of the output would you prefer site C?

c) Which site would you select for quantity of 20,000 units per year? What would be your total cost? Please give formulas with answers for rating.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M914302

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