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BACF is considering two plant sizes in each location and plan to open at most one plant in each location. Low-capacity plants can produce 10
BACF is considering two plant sizes in each location and plan to open at most one plant in each location. Low-capacity plants can produce 10 million units a year, whereas high-capacity plants can produce 20 million units a year. Running a plant incurs fixed costs. High-capacity plants exhibit some economies of scale and have fixed costs that are less than twice the fixed costs of a low-capacity plant, as shown in Table 2. All fixed costs are annualized. The variable costs of producing one million units in each country are also shown in Table 2. The vice president wants to know what the lowest cost supply chain configuration should look like
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