Katie Reynolds owns two exclusive women’s clothing stores in Miami. In her plan to expand to a third location, she has narrowed her decision to three sites—one in a downtown office building, one in a shopping mall, and one in an old Victorian house in the suburban area of Coral Gables. She feels that rent is absolutely the most important factor to be considered, although walk-in traffic is 90% as important as rent. Further, the more distant the new store is from her two existing stores, the better. She weights this factor to be 80%

as important as walk-in traffic. Katie developed the following table, in which she graded each site from A to D, with A being best. Which site is preferable?

a) Graph the total-cost lines for the four potential sites.

b) Over what range of annual volume is each location the preferable one (that with lowest expected cost)?

c) If expected volume of the ski equipment is 5,000 units, which location would you recommend? Lop9