Analysis of economic, environmental and social costs: manufacturer LO $17\mathrm{.}5,17\mathrm{.}8$

Rockhampton Sofa Company is thinking of setting up a plant in Chengdu, China. Operating data for Rockhampton and Chengdu are as follows:

$$

Rockhampton

Chengdu

Material per sofa

$$105$

$$75$

Labour time per sofa

$30$ minutes

$90$ minutes

Labour cost per hour

$$25\mathrm{.}00$

$$5$

Waste per sofa

$15$ kilograms

$35$ kilograms

Effective working weeks per annum per employee

$40$

$49$

Fixed manufacturing cost

$$100000$ per annum

$$50000$ per annum

Delivery time

$7$ days

$27$ days

If the Chengdu plant is opened, the Rockhampton plant will be closed. If the Rockhampton plant is closed the employees will almost certainly be unemployed. There is consternation in the local community about the closure, especially among older employees. The plant appears to have few airborne pollutants and does not contaminate waterways and sewers.

Required

Rank the alternatives using only financial data.

Rank the alternatives using only environmental and social impact data.

Identify any impacts that this decision may have on the broader economy.

Write a recommendation to the board outlining the issues it should consider when making this decision.

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