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3. Xun Company is looking at three potential supply chain partners located either at U, V, or W. They have estimated the following parameters for
3. Xun Company is looking at three potential supply chain partners located either at U, V, or W. They have estimated the following parameters for each location. For what demand range is each option the best? (9 points)
Location | Fixed Cost | Variable Cost |
U | 400,000 | 50 |
V | 640,000 | 30 |
W | 200,000 | 60 |
- Step 1: calculate indifference points (3 points)
- Step 2: cost line graphing (3 points)
- Step 3: identify the demand range for each location (3 points)
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