+ Problem 4 (Bonus) Hot & Cold and Caldo Freddo are two European manufacturers of home appliances that have merged. Hot & Cold has plants in France, Germany, and Finland, whereas Caldo Freddo 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 listed in the following table. Variable Production and Shipping Costs North East South West Capacity Annual Fixed Cost Hot & Cold France 100 110 105 100 50 Germany Finland 995 105 110 105 50 90 100 115 110 40 Demand is in million units per year Demand 30 20 20 20 20 35 1000 1000 850 Variable Production and Shipping Costs North East South West Capacity Annual Fixed Cost Caldo Freddo U.K. Italy 105 120 110 105 110 90 50 90 115 60 Demand is in million units per year Demand 15 20 30 20 1000 1150