A Firm That Has Recently Experienced An Enormous Growth Rate Is Seeking To Lease A Small Plant In Either Memphis Biloxi 1 (59.56 KiB) Viewed 33 times
A Firm That Has Recently Experienced An Enormous Growth Rate Is Seeking To Lease A Small Plant In Either Memphis Biloxi 2 (30.22 KiB) Viewed 33 times
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in either Memphis, Biloxi, or Birmingham. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $1,400,000 for Memphis, $1,940,000 for Biloxi, and $1,100,000 for Birmingham. Labor and material are expected to be $10 per unit in Memphis, $6 per unit in Biloxi, and $20 per unit in Birmingham. The Memphis location would increase system transportation costs by - $50,000 per year, the Biloxi location would increase them by $60,000 per year, and the Birmingham location would increase those costs by $25,000-per year. Expected annual volume is 60,000 units. 26
Birmingham..... Fixed Cost Variable Cost Indifference Point Indifference Point Prefer > Indifference Point Prefer Memphis.. Fixed Cost Variable Cost Indifference Point <Indifference Point Prefer > Indifference Point Prefer ..Memphis Fixed Cost Variable Cost . Biloxi Fixed Cost Variable Cost
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