Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but thevariable costs in Dallas are higher because shipping distances would increase.DallasDetroit$600,000$30/radioFixed costs$780,000Variable costs$22/radioa) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best aboveradios.27,00097,49722,50074,996

Identifying the feasible production units based on the fixed cost and variable cost indicating the…

Answered: Peter Billington Stereo, Inc., supplies…

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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Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Dallas $600,000 $27/radio Detroit $840,000 $21/radio a) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above 40,000 b) Dallas's fixed costs have increased by 10%. Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above Fixed costs Variable costs radios radios
ABC Ltd. Wants to choose the best location for its new aluminum plant. The manager ofproductions and operations has three possible locations to choose from. His assistantrecommends that he use break-even analysis location technique to help determine whichlocation is best based on costs. Assuming: Total fixed cost = 80,000 Price per unit= 20 AVC (Average variable cost) = 40 Break-even point= Total fixed cost / (AVC-Price per unit) Break-even point = 80,000/ (40-20) Break-even point = 4,000 1) Demonstrate to the OM manager how to go about choosing the best location using thenumerical example designed above.
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 $2.85
Populate the relevant data Is any alternative never preferred? Complete a numeric locational cost-volume Indicate over what range each of the alternatives A, B, C is the low-cost choice Costs A B C Fixed ($) 2,500,000 2,000,000 3,500,000 Variable ($ per unit) 20+6 23+6 15+6
Dobb's Ltd Wants to choose the best location for its new aluminum plant. The manager ofproductions and operations has three possible locations to choose from. His assistantrecommends that he use break-even analysis location technique to help determine whichlocation is best based on costs. Assuming: Total fixed cost = 80,000 Price per unit= 20 AVC (Average variable cost) = 40 Break-even point= Total fixed cost / (AVC-Price per unit) Break-even point = 80,000/ (40-20) Break-even point = 4,000 1) Demonstrate to the OM manager using graph how to go about choosing the best location using thenumerical example designed above.
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 _________________
Develop a network showing the origin nodes, destinations, arcs, cost per arc, supply, and demand. Match the correct answer to each question. Warehouse A B C D City E City F City G City H Warehouse Supply. 0.51 0.21 0.52 0.41 4000 Question 1 0.31 Question 2 0.56 0.43 0.35 0.41 0.28 City Demand 4,400 3,000 6,500 4,700 Match the correct answer to the following questions: 1. What is the supply constraint for Warehouse D? 2. What demand constraint for City H? 0.32 0.54 0.33 4000 0.54 0.34 0.52 6300 6000 [Choose ] [Choose ] > >
ABC Ltd. Wants to choose the best location for its new aluminum plant. The manager ofproductions and operations has three possible locations to choose from. His assistantrecommends that he use break-even analysis location technique to help determine whichlocation is best based on costs. . If total fixed cost = 40000 AVC = 20 Price per unit = 10 Break even point = 40000 / 20 - 10= 4000 So at the 4000 units of production, there will be no profit and loss as the total revenue is equal to the total cost. Demonstrate to the OM manager how to go about choosing the best location using thenumerical example you designed above.
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%?
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.
Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5 600 Annual 500 Cost ($000) 400 300 200 100 2 4 6 8 10 14 16 18 20 Q (000s of units) i. Plot the total cost curves in the chart provided above and identify the range over which each location would be best. ii. Use break-even analysis to calculate exactly the break-even quantity that defines each range.
Amazon had planned to open a second headquarters in Brooklyn that would have allegedly added 25,000 jobs to the region, increased property values, generated more business for local store owners, and generated additional sales and income tax revenue for the government. Some people were concerned, however, that increased home prices could lead to higher rent for people who rented apartments in Brooklyn. Which of the following statements are true? O Allowing Amazon to locate its second headquarters in Brooklyn is a Pareto improvement (i.e., makes one or more persons better off without making anyone worse off) even if some renters will have to pay higher rent. O Allowing Amazon to locate its second headquarters in Brooklyn would not be Kaldor-Hicks efficient if some renters will have to pay higher rent. O Allowing Amazon to locate its second headquarters in Brooklyn is a Kaldor-Hicks improvement if the gain in jobs and tax revenue more than offsets any losses experienced by renters. O…

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