Break-Even Analysis8. Two alternative locations are under consideration for a newplant: Jackson, Mississippi, and Dayton, Ohio. The Jacksonlocation is superior in terms of costs. However, managementbelieves that sales volume would decline if this locationwere chosen because it is farther from the market, and thefirm's customers prefer local suppliers. The selling price ofthe product is $325 per unit in either case. Use the followinginformation to determine which location yields the highertotal profit per year:AnnualFixed CostLocationJackson $2,050,000Dayton$2,500,000Variable Costper Unit$75$95ForecastDemand per Year27,500 units35,000 units

Production is the process in which inputs are combined to have the required output. It includes a…

Answered: the product is $325 per unit in either…

the product is $325 per unit in either case. Use the following information to determine which location yields the higher total profit per year:

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...

See similar textbooks

Related questions

Q: Which of the following is true regarding the inflow of FDI? A. Even though developing nations…

A: The amount of inward direct investment from non-resident entrepreneurs throughout the reporting…

Q: H.James Harrinton, a noted quality consultant, related the following story in Quality digest…

A: Cost of Quality refers to the approach to classifying the cost of producing quality products and…

Q: A contractor has one crane available at four different building sites at which work has just been…

A: Decision variables: X11 = Decision of moving crane from old site I to new site A. If X11 = 0, do not…

Q: How can total quality management facilitate the modern view of operation management ?

A: Total quality management or TQM is a concept of quality where the focus is not only given on the…

Q: Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less,…

A: The maximum payoff for the basic model is $155,000 and the minimum payoff is $90,000 The maximum…

Q: f feasibility study

A: A feasibility study examines a proposed project in-depth and takes into account all factors that are…

Q: Yebo Fresh (“YF”) is an award-winning ecommerce platform on a mission to provide township…

A: Modern business is quite changed everything around mankind. For both businesses and the general…

Q: Customers arrive at Cochinito Bank according to a Poisson distribution, with a mean of 45 customers…

A: Given data: Average arrival rate (λ) = 45 customers per hour Average service time = 5 minutes Then…

Q: Which of the following aspects of supply chain management have strong connections? (Check all that…

Q: An investor is given the following investment alternatives and percentage rates of return: 22/11/200…

A: In the given table, the percentage rates of return are given against each market scenario and…

Q: DataSpan, Incorporated, automated its plant at the start of the current year and installed a…

A: Given data: Month 1 2 3 4 Percentage of on-time deliveries 92 % 87 % 84 % 81 % Total sales…

Q: In response to intensive foreign competition, the management of Florex Company has attempted over…

A: 1. Prevention Costs – costs from preventive actions to minimize the defects 2. Appraisal…

Q: The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements…

A: Formulae used: To determine ending inventory & Subcontract Units Ending inventory = (Previous…

Q: Problem 16-11 (Algo) One of your Taiwanese suppliers has bid on a new line of molded plastic parts…

A: Net present value (NPV) is a method used to determine the current value of all future cash flows…

Q: 1. Draw a network diagram representing the project. Put the node numbers in circles and draw arrows…

A: A table consisting of activity names, initial node, final node and estimated duration is given in…

Q: If D = 8,500 per month, S = $46 per order, and H = $2.00 per unit per month, Part 2 a)…

A: EOQ considers the cost of placing an order, the cost of storing goods, and the time of restocking.…

Q: An assembly line with 50 activities is to be balanced. The total amount of time to complete all 50…

A: Cycle time is indicating the available average time for producing each unit of items. Considering…

Q: What schedule produces the shortest time span in which these orders can be completed? Sequence:…

A: As per Bartleby guidelines, we can only solve the first three subparts of one question at a…

Q: he Digital Firm, 15th Edition What things should Target Canada have done differently to

A: What Target Canada Needs to Do Differently to Succeed

Q: Barangay Punta Princesa is trying to decide between two alternative order plans for its inventory of…

A: Given- Annual Demand (D) = 1000 units For plan A: Ordering cost (S)=40 per order Holding Cost (H) =…

Q: Houston North Hospital is trying to improve its image by providing a positive experience for its…

A: Firstly, Calculating Fraction Size: Day No. of Unsatisfied Patients Sample Size Size Fraction 1…

Q: Examining trade-offs between IT and traditional logistics functions is better than focusing on IT…

A: Only focusing on the IT contracts is the area of performance and growth. Concentration on…

Q: Consider the following all-integer linear program. 1x₁ + 1x₂ Max s.t. 5X1 + 6x₂ 31 1x₁ + 5x₂ ≤ 20…

A: Linear programming is a mathematical technique that is also used in operations management…

Q: Question 4 You are provided with the following information for a project, with activity durations…

A: Given-

Q: which of the following is NOT a carrying inventory select one a.all of these b.caital costs…

A: Inventory management is the process of ordering, storing, using, and selling the inventory of the…

Q: 3. To be eligible for the leadership training program offered by the office, a student must have at…

A: The 'IF' function is used to make logical comparisons and the 'OR' function is used to expand the…

Q: The average monthly demand requirement=1775 units. (Enter your response as a whole number.) Part 3…

A: Inventory management is the process of ordering, storing, using, and selling the inventory of the…

Q: The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes were…

A: Productivity is analysis of a efficient of company's performance that compare the product and…

Q: f JIT (Just-In-Time) means both a technical solution to the scheduling task and a managerial…

A: Just-In-Time (JIT) is a manufacturing philosophy that emphasizes the efficient use of manufacturing…

Q: In Exercises 9-20, use the simplex method to solve the given problem. (In each case the objective…

A: Given LP- Max Z = x1+ 2x2Subject to -x1+ 4x2≤8x1+x2≤12x1, x2≥0

Q: Gregory has started a small agricultural business that specialises in maize and sunflower seeds in…

A: MRP systems A material resource planning system is a computer-based information system that helps in…

Q: The Problem The company business is production of porcelain The products are plates, cups…

A: Decision variable: Suppose-P be the no. of plates to be producedC be the no. of cups to be producedT…

Q: What does a decrease in inventory days tell us?

A: To understand inventory days, one needs to fundamentally understand inventory. An inventory in…

Q: Brooks Development Corporation (BDC) faces the following capital budgeting decision. Six real estate…

A: Objective Functions and Constraints: Based on the given details, the objective…

Q: A contractor, Susan Meyer, has to haul gravel to three building sites. She can purchase as much as…

A: Objective functions and constraints: Objective functions: Minimize C = (100+300) X11…

Q: Using Johnson's rule for 2-machine scheduling, the sequence is: Scheduled Order Job 1 A B LL F E D C

A: Given the data stated below, Job Operation 1(Hours) Operation 2(Hours) A 4 8 B 10 5 C 3 11…

Q: Tesla Corporation has three different factories (A, B and C) where they make Premium Electric…

A: Transshipment is a special category of linear programming problem wherein the optimal solution is…

Q: What is supply chain risk and provide an example of it

A: The term "supply chain management" describes how businesses control the flow of their products,…

Q: A business school is considering replacing its copy machine with a faster model. Past records show…

A: Find the Calculation methods below: Expected time in the system (Ws) = 1(μ-λ)Ws = 5 minutesλ = 24…

Q: For the data given below, what would the naive forecast (without a trend) be for period 5? Period…

A: Naive forecast: This is one of the forecasting techniques which simply takes the actual value of…

Q: What are the key traits and differences of Project and Review Technique (PERT)/Critical Path Method…

A: PERT is a project management tool that may be used to control unpredictable project activities. It…

Q: Why would this cause a procurement professional to integrate with trucking or train companies more…

A: Land transportation falls under the middle mode as compared to air and sea transportation because of…

Q: Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less,…

A: Find the Calculations below: The maximum and minimum values for each model are shown in the above…

Q: The following jobs are waiting to be processed at a small machine center. JOB DUE DATE DURATION…

A: Find the Calculation methods below: Step 1: Arrange the job order based on the longest processing…

Q: ERP System Implementation You are working for a Project Consulting Company as a Project Manager.…

A: Project management This can be defined as a scientific approach to managing projects for an…

Q: How the employees effectively handle a Heavy workload?

A: Organizations usually come across tons of work and they have to complete the tasks on time with…

Q: A Town Council has decided to build a new community center to be used for conventions, concerts, and…

A: Expected value = ∑Probability of state of nature×Payoff associated with the state of nature The…

Q: Demand = 1570 per quarter, T (Inventory period) <= 5.4 months, Lead Time weeks, safety stock = 15.…

A: The following information is provided to us: Demand per quarter is 1570, The inventory Period is 5.4…

Q: Explain the role of TPS in Supply chain management

A: TPS stands for transaction processing system. This is an information system that is commonly used by…

Q: Identify what documents you would find in the above transactions of Chocolate company in the month…

A: Inventory management refers to the process of sourcing, storing, and selling inventory (finished and…

Question

Break-Even Analysis
8. Two alternative locations are under consideration for a new
plant: Jackson, Mississippi, and Dayton, Ohio. The Jackson
location is superior in terms of costs. However, management
believes that sales volume would decline if this location
were chosen because it is farther from the market, and the
firm's customers prefer local suppliers. The selling price of
the product is $325 per unit in either case. Use the following
information to determine which location yields the higher
total profit per year:
Annual
Fixed Cost
Location
Jackson $2,050,000
Dayton
$2,500,000
Variable Cost
per Unit
$75
$95
Forecast
Demand per Year
27,500 units
35,000 units

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction:-

VIEW

Step 2 Solution:

VIEW

Step 3 ANSWER:-

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Your answer is incorrect. please correct the answer

Solution

by Bartleby Expert

SEE SOLUTION

Similar questions

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.
Peter Billington Stereo, Inc., supplies car radios to auto manufacturers a nd 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. Given the following costs: a) Perform an analysis of the volume over which each location is preferable.b) How does your answer change if Dallas's fixed costs increase by 10%?
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.I. Design a numerical example in order to demonstrate to the Productions andOperations Manager how break-even analysis can be used in this case. II. Demonstrate to the OM manager how to go about choosing the best location using thenumerical example you designed above.
a. 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. I. Design a numerical example in order to demonstrate to the Productions andOperations Manager how break-even analysis can be used in this case. II. Demonstrate to the OM manager how to go about choosing the best location using thenumerical example you designed above. b. The staff training centre of a telecommunications company provides training for itsregional employees every year. The capacity of the training centre was designed to train1,800 employees per year. Due to the complexity of the programmes, the mostemployees that centre can train per year is 1,400. In the past year, 1,350 employees wereMGMT2026 Production and Operations Managementtrained. Calculate:-i. The efficiency rate of the…
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.
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.
A valve manufacturer is considering three alternative locations for a new plant for manufacturing ball valves for oil and gas industry. Since the plant ships nationwide, revenue is assumed the same regardless of plant location. The estimated annual fixed and variable costs for each site is shown in TABLE Location Costs A B C Fixed (RM) 700,000 1,000,000 $1,500,000 Variable (RM) $28 $18 $12 Identify the range of output for which each location provides the lowest total cost. Show necessary graph and calculation used in the analysis. Discuss on the finding(s).
Assistance please. 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. I. Design a numerical example in order to demonstrate to the Productions andOperations Manager how break-even analysis can be used in this case. II. Demonstrate to the OM manager how to go about choosing the best location using thenumerical example you designed above.
Describe the people that are involved in facility location decisions with 3 venture methodology?
Daniel Tracy, owner of Martin Manufacturing, must expand by building a new factory. The search for a location for this factory has been narrowed to four sites: A, B, C, or D. Thefollowing table shows the results thus far obtained by Tracy by using the factor-rating method to analyze the problem. The scale used for each factor scoring is I through 5. a) Which site should Tracy choose?b) If site D 's score for Energy costs increases from a 3 to a 5, do results change?c) If site A's Weather score is adj usted to a 4, what is the impact? What should Tracy do at this point?
Accel Express, Inc., collected the following information on where to locate a warehouse (1 = poor, 10 = excellent): Location Score Location Factor Factor Weight A B Construction costs 10 8 5 Utilities available 10 7 7 Business services 10 4 7 Real estate cost 20 7 4 Quality of life 20 4 8 Transportation 30 7 6 a. Which location, A or B, should be chosen on the basis of the total weighted score?b. If the factors were weighted equally, would the choice change?
Wiebe Trucking, Inc., is planning a new warehouse to servethe western United States. Denver, Santa Fe, and Salt LakeCity are under consideration. For each location, annual fixedcosts (rent, equipment, and insurance) and average variablecosts per shipment (labor, transportation, and utilities) arelisted in the following table. Sales projections range from500,000 to 600,000 shipments per year. a. Plot the total cost curves for all the locations on a singlegraph.b. Which city provides the lowest overall costs?