OPM 400

Help with this question but please Chegg stop to sent wrong answers that is not fair.

Klingon Specialties Mfg. Ltd.

Klingon Specialties Mfg. Ltd. has expanded rapidly to near capacity levels. It is close to turning down

widget bearing orders. Bipin Smythe, the owner, thinks the time has come to search for an international

manufacturing location. Three locations head the list, Option 1 Reversistan, Option 2 the Fiefdom

Principality, and Option 3 Serfs Democratic Republic. Some hard costs were simple to arrive at but an

estimate had to be made for labour. First year requirements would be 15,000 units. Known costs are:

Potential Fixed Cost Variable Cost per unit - CDN$

Locations CDN$ per year Materials Overhead

Option 1 195,000 0.20 0.40

Option 2 175,000 0.25 0.75

Option 3 165,000 0.95 0.95

It was estimated the labour skills available in each location would permit the following production out puts:

Locations Units per hour Cost per hour - CDN$

Option 1 8 3.20

Option 2 12 8.40

Option 3 10 10.00

Although the international locations are separated geographically, Bipin Smythe, the owner and

CEO, has determined the container load transportation costs and travel time are essentially equal;

hence, can be ignored in any calculations. Smythe has visited each location and is satisfied with what

he saw. In spite of that, Smythe has concerns if he has considered all the relevant factors in location

selection. He has heard rumours about each location but is unsure which are the important factors

and questionable factors that might improve in time. He has presented this problem to you saying

that all three locations are viewed as developing small nations with Peoples Democratic Republic

the most developed and Reversistan the least. The development gaps are not great but measurable.

Smythe does hope to expand into other international markets when the time is right.

Deliverables:

1. Produce a graph with total cost lines for each location. Marks = 2

Tip: Scale (Y-axis)s should be times (x) $1000

2. Calculate the crossover points for options 1 vs 2, 2 vs 3, and 1 vs 3. Marks = 5

3. What is the best location for costs overall? Marks = 1

4. What should be Smythes main three concerns that might apply for the locations? Marks = 2