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Audi Motors is considering three sites - A, B, and C - at which to locate a factory to build its new-model automobile, the Audi 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.

Audi Motors has gathered the following data:

Site Annualized Fixed Cost Variable Cost per Auto Produced
A $11,000,000 $2,500
B $20,000,000 $1,900
C $27,000,000 $1,050


The firm knows it will prodice 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.

The value of volume, V, of production above which site C is recommended = ______ SUV XL500s (Round your response up to the next whole number).

The value of volume, V, of production below which site A is recommended = _______SUV XL500s (Round your response up to the next whole number).

 

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M9374248

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