Problem 8-6a firm that has recently experienced an enormous, Ask an Expert

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Problem 8-6

A firm that has 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 given the following information:

Annual costs for building, equipment, and administration would be $34,000 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 $27,200 per year. Expected annual volume is 10,200 units.(Omit the "tiny_mce_markerquot; sign in your response.)

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