Please answer question #18 Question #17 has been answered.

Use the following information for questions 17-18.

Mahomes Manufacturing has one factory in Kansas City. They have capacity to produce 40,000 weight bench units a month at a cost of $20 per unit. They ship to three locations as shown in the chart below with one truckload being 100 units per truck. Their expected volume is 35,000 units.

Lanes	Cost/Truck	Monthly Volume
Dallas	1000	20000
San Antonio	1800	7000
Denver	2500	8000

The company is adding an additional location to optimize their network in Lubbock, Texas. That facility has a capacity of 10,000 units a month. The cost to produce in Lubbock is slightly higher at $25 per unit.

Lanes	Cost/Truck
Dallas	1250
San Antonio	1175
Denver	1700

17. For the description above, what is the potential cost savings per unit to produce volume in Lubbock instead of Kansas City for the Denver Volume (assuming you have capacity)? (5)

Answer: $3.00 per unit

18. If you optimize the network, what is potential savings on a monthly basis? (5)

a. 45,000

b. 37,500

c. 75,750

d. 26,500

e. 12,500