Upfront cost of a plant : $4750,000, with a 1 year useful life

Labor Cost: four employees being paid $8 per hour. 40 hours guaranteed per week for 52 weeks per year

Raw materials per block: $.80.

Maintenance costs: If the plant produces Q blocks then the annual maintenance cost is given by 0.000003Q^2.

For example: If the plant produced 1,000,000 blocks in a year the scheduled maintenance cost will be .000003Q^2 = .000003 * (1,000,000)^2 = $3,000,000

Suppose that Jim estimates the annual demand for Block in Radiator Springs area to be around 1.275 million blocks. Should they build one plant or two in Radiator Springs? (or three or perhaps more?) Why? (Hint: if Jim builds only one plant, what will the average cost of each plant be, and what will his overall average cost be?