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5 A . You work for a firm that makes tables. Your company makes 2 types of tables that sell equally well for the same
A You work for a firm that makes tables. Your company makes types of tables that sell equally well for the same price, and you can always sell as many as you can make. Each month your firm can make tables of either type or a combination of the two. Type A takes units of wood and unit of metal and Type B uses units of wood and units of metal. Assume each unit of wood costs $ and each unit of metal costs $ Assume it costs $ unitmile to ship wood and $unitmile to ship metal, and $tablemile to ship your final product. Your current location Site A is miles from where you get wood, miles from where you get metal and miles from the market.
points How many of each table are you going to make each month at these costs?
point What's the lowest homemade cost for tables that would leave your business viable in this market?
B points Suppose there's a new site available Site B that's the same distance from the market but miles from where you get wood and miles from where you get metal. Will you move? If yes, what's the most you'd be willing to pay in relocation costs? if no how much would you need in government incentives beyond relocation costs to move? What assumptions did you use when making this decision? Both relocation costs and government incentives are upfront, onetime amounts.
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