Problem 8-1 (Algo) A newly formed fim must decide on a plant location. There are two alternatives under consideration: locate near the major raw materiels or locate near the major customers. Locating near the raw materials will result in lower fixed and veriable costs compared to locating near the market, but the owners beleve there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $190 in either case. Annual fixed costs (s millionsl 55 Variable cost per unit Expected annual desand (units) Onaha Kansas City !1.0 10, 400 11,000 Click here for the Excel Deta File Using the above information, determine which location would produce the greater profit. uld produce the greater gross proft of Kansas City Omaha
Problem 8-1 (Algo) A newly formed fim must decide on a plant location. There are two alternatives under consideration: locate near the major raw materiels or locate near the major customers. Locating near the raw materials will result in lower fixed and veriable costs compared to locating near the market, but the owners beleve there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $190 in either case. Annual fixed costs (s millionsl 55 Variable cost per unit Expected annual desand (units) Onaha Kansas City !1.0 10, 400 11,000 Click here for the Excel Deta File Using the above information, determine which location would produce the greater profit. uld produce the greater gross proft of Kansas City Omaha
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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