1. Mr. Jack is in the process of expanding his manufacturing business. He decided to open a plant in the coming year. He has four locations in mind. The costs information for these locations is in the following table. Location A B C D Fixed Costs 60,000 80,000 100,000 130,000 Variable costs/unit 30 20 15 10 a. i. Write an equation to represent the total costs for each location. ii. Draw the total costs lines for each location on the same axes. (Use output ranges of 200, 400, 600, 800 etc. and intervals of $50,000 on the Y axis. iii. Over what range of output is location A the most preferred location? iv. Over what range of output is location B the most preferred location? v. Over what range of output is location C the most preferred location? b. A food manufacturer wants to locate a warehouse to serve its major customers. The customers, annual volume and the X and Y coordinates are shown in the table below. Customer Annual Volume X-Coordinate Y-Coordinate Judy Inc 25 3 7 Zac Supermarket 13 5 2 Harry Inc 6 8 4 Sky Productions 4 1 5 i. Using the centre of gravity location technique, determine the location coordinates that will minimize the transportation costs for their family of products.
QUESTION 2
1. Mr. Jack is in the process of expanding his manufacturing business. He decided to open
a plant in the coming year. He has four locations in mind. The costs information for
these locations is in the following table.
Location | A | B | C | D |
Fixed Costs | 60,000 | 80,000 | 100,000 | 130,000 |
Variable costs/unit | 30 | 20 | 15 | 10 |
a.
i. Write an equation to represent the total costs for each location.
ii. Draw the total costs lines for each location on the same axes. (Use output ranges
of 200, 400, 600, 800 etc. and intervals of $50,000 on the Y axis.
iii. Over what range of output is location A the most preferred location?
iv. Over what range of output is location B the most preferred location?
v. Over what range of output is location C the most preferred location?
b. A food manufacturer wants to locate a warehouse to serve its major customers.
The customers, annual volume and the X and Y coordinates are shown in the
table below.
Customer | Annual Volume | X-Coordinate | Y-Coordinate |
Judy Inc | 25 | 3 | 7 |
Zac Supermarket | 13 | 5 | 2 |
Harry Inc | 6 | 8 | 4 |
Sky Productions | 4 | 1 | 5 |
i. Using the centre of gravity location technique, determine the location
coordinates that will minimize the transportation costs for their family of
products.
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