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
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Problem 8-1 (Algo)
A newty formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw
materials or locate near the major customers. Locating near the rew materials will result in lower fixed and variable costs compared to
locating near the markket, but the owners beleve there would be a loss in sales volume because customers tend to favor local
suppliers. Revenue per unit wil be $190 in either case.
Annual fixed costs (s millions ana Kansas City
Variable cost per unit
Expected annual desand (units)
Onaha
18,400
11,000
Click here for the Excel Data File
Using the above information, determine which location would produce the greater profit.
- suld produce the greater gross profit of
Kansas City
Omaha
Answer
Skip
Exit
Transcribed Image Text:10:27 器3令.0 expert.chegg.com/expertqna [2 = Chegg Time remaining: 00:09:52 Operations Management Will upvote instantly, thank you! Problem 8-1 (Algo) A newty formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the rew materials will result in lower fixed and variable costs compared to locating near the markket, but the owners beleve there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit wil be $190 in either case. Annual fixed costs (s millions ana Kansas City Variable cost per unit Expected annual desand (units) Onaha 18,400 11,000 Click here for the Excel Data File Using the above information, determine which location would produce the greater profit. - suld produce the greater gross profit of Kansas City Omaha Answer Skip Exit
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