Question
Of the three sites being considered by Rocko Mamas, A, B and C at which to build its latest state of the art caf. The
Of the three sites being considered by Rocko Mamas, A, B and C at which to build its latest state of the art caf. The goal is to locate at a minimum cost site, where cost is measured by the annual fixed plus variable costs of production. The fixed annualised costs per site are the following A: $10,000,000, B: $20,000,000 and C: $25,000,000. The variable cost per output produced are A: $2,500, B: $2,000 and C: $1,000. Rocko Mamas has estimated that it will serve between 0 and 60 000 clients in the new facility per year. For what values of volume if any would site C be recommended? In addition, what volume indicates site A is optimal? Lastly, over what range of volume is site B optimal? (
\begin{tabular}{l|l|l|l|l|l|l|} \hline & \multicolumn{2}{|l|}{ EAROPEAN CITY UNDER CONSIDERATION } & \multirow{2}{*}{ IMPORTANCE OF THIS FACTOR AT THIS TIME } \\ \cline { 2 - 6 } & A & B & C & D & \\ \hline A. Demographics & 70 & 70 & 60 & 90 & 20 \\ \hline B. Visitor market & 80 & 60 & 90 & 75 & 20 \\ \hline C. Transportation & 100 & 50 & 75 & 90 & 20 \\ \hline D. Restaurantsightclubs & 80 & 90 & 65 & 65 & 10 \\ \hline E. Low political risk & 90 & 60 & 50 & 70 & 10 \\ \hline F. Real estate market & 65 & 75 & 85 & 70 & 10 \\ \hline G. Comparable market analysis & 70 & 60 & 65 & 80 & 10 \\ \hline \end{tabular}Step by Step Solution
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