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A manufacturer of industrial machines wants to move to a larger plant, and has identified two alternatives. Location A has annual fixed cost of $875,000
A manufacturer of industrial machines wants to move to a larger plant, and has identified two alternatives. Location A has annual fixed cost of $875,000 and variable cost of $17,000 per unit; location B has annual fixed cost of $953,000 and variable cost of $11,000 per unit. a. At what quantity of output would the two locations have the same total cost? Quantity 91 units b-1. For what range of output would location A be superior? (Do not leave any empty spaces; input a O wherever it is required.) Range 0 to b-2. For what range would B be superior (i.e., have lower total annual cost)? 14 or less 14 or more C 2. B The owner of a sandwich shop hopes to add one new outlet. She has studied three locations. Each would have the same labour and materials costs (food, serving containers, napkins, etc.) of $1.65 per sandwich. Sandwiches sell for $2.87 each in all locations. Rent and equipment costs would be $4,200 per month for location A, $4,700 per month for location B, and $5,100 per month for location C. a. Determine the quantity necessary at each location to realize a monthly profit of $10,500. (Round up the final answers to the next whole number.) Location A Quantity 13943 Following are the factor ratings (100 points is the maximum) of three possible locations for a clothing store. Factor Location Weight A B Convenience of access .10 79 Parking facility .15 89 Frontage . 14 83 82 81 Shopper traffic .41 88 78 Operating cost .10 83 84 Neighbourhood .10 69 71 887969 606674 9218 L 6000 N 69 86 80 76 96 87 94 1.00 a. Determine the composite score for each location. (Round intermediate calculations to 2 decimal places. Round the final answers to 2 decimal places.) A B C Composite score 82.78 85.96 80.91
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