A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs compared to locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $181 in either case. Kansas City $1.1 $ 46 10,550 Annual fixed costs (5 millions) Variable cost per unit Expected annual demand (units) Omaha $1.2 $ 31 9,950 Click here for the Excel Data File Using the above information, determine which location would produce the greater profit. would produce the greater gross profit of

A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs compared to locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $181 in either case. Kansas City $1.1 $ 46 10,550 Annual fixed costs (5 millions) Variable cost per unit Expected annual demand (units) Omaha $1.2 $ 31 9,950 Click here for the Excel Data File Using the above information, determine which location would produce the greater profit. would produce the greater gross profit of

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near theraw materials will result in lower fixed and variable costs than locating near the market, but theowners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $185 in either case. Using the following information, determinewhich location would produce the greater profit.Omaha Kansas CityAnnual fixed costs ($ millions) $1.2 $1.4Variable cost per unit $36 $47Expected annual demand (units) 8,000 12,000
A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs compared to locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $183 in either case. Omaha 1.0 33 10,050 Annual fixed costs ($ millions) Variable cost per unit. Expected annual demand (units) $ Kansas City $ Kansas City $ 0.9 $ 48 10,650 Click here for the Excel Data File Using the above information, determine which location would produce the greater profit. would produce the greater gross profit of
Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following data, which location would you recommend? Location Downtown Suburban Annual rent, including utilities Expected annual demand (sandwiches) Average variable costs per sandwich Average selling price per sandwich $12,000 30,000 $1.50 $3.25 $8,000 25,000 $1.00 $2.85
Need help please show formula how to solve please. Thanks A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs that locating near the market, but the owner believes that there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $180 in either case. Using the following information, determine which location would produce greater profit.
A newly formed firm must decide on a plant location. There are 2 alternatives under consideration: locate near the major raw materials of locate near the the major customers. Locating near the raw materials will result in lower fixed costs and variable costs than locating near the market, but the owners believe ther would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $185 in either case. Using the following information, determine which location would produce greater profit.. Annual Fixed costs Omaha $1.2 million, Kansas City $1.4 million Variable cost per unit Omaha $26, Kansas City $47 Expected annual demand Omaha 8000 units, Kansas City 12000 units.
Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following data, which location would you recommend? Location Downtown Suburban Annual rent, including utilities $10,500 $7,250 Expected annual demand (sandwiches) 37,500 23,500 Average variable costs per sandwich $1.25 $1.20 Average selling price per sandwich $3.15 $2.80 Expected annual profits from the Downtown location are $ (Enter your response as an integer.) Expected annual profits from the Suburban location are $. (Enter your response as an integer.) Therefore, the V location should be recommended.
A firm that recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi MS; or Birmingham, AL. Prepare an economic analysis of the three locations giving the following information. Annual costs for building, equipment, and administration would be $64,000 for Memphis, $74,000 for Biloxi, and $109,000 for Birmingham. Labor and materials are expected to be $7 per unit in Memphis, $6 per unit in Biloxi, and $6 per unit in Birmingham. The Memphis location would increase system transportation costs by $63,000 per year, the Biloxi location by $73,500 per year, and the Birmingham location by $25,900 per year. Expected annual volume is 14,900 units. Total Cost Memphis _______________ Biloxi _______________ Birmingham _________________
The fixed and variable costs for four potential plant sites for Brent Snyder's Ski Supplies are shown here: a) Graph the total-cost lines for the four potential sites.b) Over what range of annual volume is each location the preferable one (that with lowest expected cost)?c) If expected volume of the ski equipment is 5,000 units, which location would you recommend?
Silky Industries is looking for a location for its second telephone remanufacturing facility. Two cities are under consideration. The two most important location factors are: Factor A "availability of resources" and Factor B "availability of customers." However, the company is having great difficulty assigning relative weights to these factors. Assuming that the factor weights must sum to 100, what range of weights would make Blake the superior location? E Click the icon to view the factors table. The total weighted factor scores are the same for the following weights: Factor A=O and Factor B =D. As the weight of Factor B becomes Blake will be the superior location. (Enter your responses as whole numbers.) More Info Factor Score for Each Location Factor City Factor Weight Blake Irmo A. Availability of resources B. Availability of customers Total 8 10 9 6. 100 Print Don
A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive (Hint: the crossover point)? Please show your work. New Jersey Delaware Variable Costs ($ per unit) _____ (Please pick a number from 11-20 and fill in the blank above. Use the number for your calculation.) _____ (Please pick a number from 21-30 and fill in the blank above. Use the number for your calculation.) Fixed Costs $___________ (Please pick a number from 1,000,000-1,200,000 and fill in the blank above. Use the number for your calculation.) $___________ (Please pick a number from 800,000-1,000,000 and fill in the blank above. Use the number for your calculation.)
For each of the four types of organizations shown, rate the importance of each factor in terms ofmaking location decisions using L = low importance, M = moderate importance, and H = highimportance.Factor Local Bank Steel Mill Food Warehouse Public SchoolConvenience for customersAttractiveness of buildingNearness to raw materialsLarge amounts of powerPollution controlsLabor cost and availabilityTransportation costsConstruction costs
Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The com-pany is undecided between Detroit and Dallas as the site. The COST DALLAS DETROITFixed costs $600,000 $800,000Variable costs $28/radio $22/radioa) Perform an analysis of the volume over which each location ispreferable.b) How does your answer change if Dallas’s fixed costs increaseby 10%?