A rapidly expanding company is looking to lease a small plant in Memphis, Tennessee, Biloxi, Mississippi, or Birmingham, Alabama. Prepare a cost benefit study for each of the three locations using the following data: The annual construction, facilities, and administration expenses for Memphis, Biloxi, and Birmingham will be $40,000, $60,000, and $100,000, respectively. In Memphis, labour and materials are estimated to cost $8 per month, $4 in Biloxi, and $5 in Birmingham. The Memphis site would add $50,000 a year to device transportation expenses, the Biloxi location would add $60,000 per year, and the Birmingham location would add $25,000 per year. The annual production is expected to be 10,000 units

A rapidly expanding company is looking to lease a small plant in Memphis, Tennessee, Biloxi, Mississippi, or Birmingham, Alabama. Prepare a cost benefit study for each of the three locations using the following data: The annual construction, facilities, and administration expenses for Memphis, Biloxi, and Birmingham will be $40,000, $60,000, and $100,000, respectively. In Memphis, labour and materials are estimated to cost $8 per month, $4 in Biloxi, and $5 in Birmingham. The Memphis site would add $50,000 a year to device transportation expenses, the Biloxi location would add $60,000 per year, and the Birmingham location would add $25,000 per year. The annual production is expected to be 10,000 units

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter6: Optimization Models With Integer Variables

Section: Chapter Questions

Problem 100P

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A firm that has recently experienced enormous growth is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $40,000 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $25,000 per year. Expected annual volume is 10,000 units. 6.
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