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Course textbook, 7 t h edition, Chapter 5 , Problem 8 ( Hot&Cold and CaldoFreddo ) ( pp . 1 3 3 - 1 3
Course textbook, edition, Chapter Problem Hot&Cold and CaldoFreddopp
Hot&Cold and CaldoFreddo are two European manufacturers of home appliances that have merged. Hot&Cold has plants in France, Germany, and Finland, whereas CaldoFreddo has plants in the United Kingdom and Italy. The European market is divided into four regions: north, east, west, and south. Plant capacities millions of units per year annual fixed costs millions of euros per year regional demand millions of units and variable production and shipping costs euros per unit are as shown in Table
Each appliance sells for an average price of euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: France, ; Germany, ; Finland, ; UK; and Italy,
TABLE Capacity, Cost, and Demand Data for Hot&Cold and CaldoFreddo
tableVariable Production and Shipping Costs,tableAnnualFixed CostNorth,East,South,West,CapacityHot&Cold,France,
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