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Hyundai Motors is considering three sites A , B , and C at which to locate a factory to build its new electric car batteries.
Hyundai Motors is considering three sites A B and C at which to locate a factory to build its new electric car batteries. The goal is to locate at a minimumcost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data:
Site
Annualized Fixed Cost
A $
B $
C $
Variable Cost per Battery Produced
A $
B $
C $
The firm knows it will produce between and batteries at the new plant each year, but, thus far, that is the extent of its knowledge about production plans.
Part
a The value of volume, V of production above which site C is recommended
batteries round your response up to the next whole number
Part
b The value of volume, V of production below which site A is recommended
enter your response here batteries round your response up to the next whole number
Part
c Over what range of volume is site B optimal?
A
Site B is never optimal because its cost line always exceeds that of A or C for all volume levels.
B
Site B is optimal for volumes from to batteries.
C
Site B is optimal for volumes above batteries.
D
Site B is always optimal because its cost line is always below that of A and C for all volume levels.
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