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A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near
A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs compared to locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $172 in either case. Omaha Kansas City Annual fixed costs ($ millions) 1.1 1.2 Variable cost per unit $ 22 $ 37 Expected annual demand (units) 9,500 10,100 $ $ Click here for the Excel Data File Using the above information, determine which location would produce the greater profit. would produce the greater gross profit of A toy manufacturer produces toys in five locations throughout the country. Raw materials (primarily barrels of powdered plastic) will be shipped from a new, centralized warehouse whose location is to be determined. The monthly quantities to be shipped to each location are the same. A coordinate system has been established, and the coordinates of each location have been determined as shown. Determine the coordinates of the centralized warehouse. (Round X and y to 1 decimal place.) Location (x,y) A 9,7 8,5 4,8 4,7 8,4 B C D E Click here for the Excel Data File I= j=
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