COST VICTORIA PERTH Fixed $1,000,000 $800,000 Variable $73/unit $112/unit

A firm is considering two location alternatives. At location C, fixed costs would be $4,000,000 per year, and variable costs $0.45 per unit. At alternative D, fixed costs would be $5,000,000 per year, with variable costs of $0.40 per unit. If annual deman is expected to be 20 million units, which plant offers the lowest total cost? Select one: a. Plant D, because Plant D is cheaper than Plant C for all volumes below 25 million units. O b. Neither Plant C nor Plant D, because the crossover point is at 20 million unit O c. Plant C, because Plant C is cheaper than Plant D for all volumes below 25 million units. Locational Co •X= Volume • Y= Cost • Cost depends or • Fixed cost y-in • Variable cost% D Locational C

Brian Trump has obtained fixed- and variable-cost information for four potential sites for his professional wrestling school and summarized it in tabular form below. All values are in dollars. Site Fixed Cost Variable Cost A 10,000 24 B 12,000 20 C 14,000 18 D 16,000 17 Brian plans to charge the same amount for tuition regardless of where he decides to establish his school. If he believes that 700 students will matriculate each year, which site will result in the lowest total cost?

A company that is developing a strategy that entails obtaining location advantages for several of its different inputs A) would have each value chain activity replicated in each of its host country locations. B) would be pursuing a low cost strategy with economies of scale. C) would concentrate each value chain activity in the country in which can be performed most efficiently or effectively. D) would concentrate most of its value chain activities in its home country, where it is most familiar with the location. E) would implement a multi-domestic or multinational strategy.

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%?

On the cost- volume analysis chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which:a) fixed costs arc equal for two alternative locations.b) variable costs are equal for two alternative locations.c) total costs are equal for all alternative locations.d) fixed costs equal variable costs for one location.c) total costs are equal for two alternative locations.

An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow. Fixed Cost Variable Cost Location A $100,000 $10 B $150,000 $7 C $200,000 $5 600 Annual 500 Cost ($000) 400 i. ii. 300 200 100 2 4 6 8 10 14 16 18 20 Q (000s of units) Plot the total cost curves in the chart provided above and identify the range over which each location would be best. [7 marks] Use break-even analysis to calculate exactly the break-even quantity that defines each range. [3 marks]

How do facility location decisions differ for service facilities and manufacturing plants?

The Quick Copy center for document copying is decidingwhere to locate a new facility. Th e annual fi xed and variable costsfor each site it is considering have been estimated as follows: If demand is expected to be 3000 units, which location is best?

Solve on EXCEL spreadsheets