Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 8, Problem 1.1Q
Summary Introduction
Interpretation: There needs to be discussion on the best location decision based on the given information.
Concept Introduction: The break-even analysis helps managers to find out the best possible facility location based on the cost factor.
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Chapter 8 Solutions
Practical Operations Management
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7P
Ch. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 1.1QCh. 8 - Prob. 1.2QCh. 8 - Prob. 1.3QCh. 8 - Prob. 1.4QCh. 8 - Prob. 2.1QCh. 8 - Prob. 2.2QCh. 8 - Prob. 2.3QCh. 8 - Prob. 3.1QCh. 8 - Prob. 3.2QCh. 8 - Prob. 3.3QCh. 8 - Prob. 3.4Q
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- The owner of a food truck implemented a new location strategy so that they would be better positioned near a crowded office park during the lunch hour. How should they evaluate the new location strategy?arrow_forwardOn the cost–volume analysis chart where the costs of twoor more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which:a) fixed costs are equal for two alternative locations.b) variable costs are equal for two alternative locations.c) total costs are equal for all alternative locations.d) fixed costs equal variable costs for one location.e) total costs are equal for two alternative locations.arrow_forwardHow can the centre-of-gravity method be used to find the best locations for local services such as public libraries, medical centres, or post offices? What constraints should be considered when the method is used in large, congested cities?arrow_forward
- On the cost- volume analysis chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which:a) fixed costs arc equal for two alternative locations.b) variable costs are equal for two alternative locations.c) total costs are equal for all alternative locations.d) fixed costs equal variable costs for one location.c) total costs are equal for two alternative locations.arrow_forwardA manufacturer must choose between locating in Dallas (fixed cost of $60,000 / year and variable cost of $28 per unit) or Denver (fixed cost of $80,000 / year and variable cost of $22 per unit. Revenue per unit is $35 in either location. The expected demand is 20,000 units in Dallas and 15,000 units in Denver. ___________ 3a) Which location would produce the greater profit? ___________ 3b) How much is that profit?arrow_forwardThe following table shows the fixed cost and variable cost for 3 locations. Construct cost curves for these 3 locations for production from 0 to 200 units at 20 units intervals. What would be the range of production units that would give Location A a competitive advantage? What would be the range for Location B and Location C, respectively?arrow_forward
- An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow. Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5 Plot the total cost curves in the chart provided above and identify the range over which each location would be best. Use break-even analysis to calculate exactly the break-even quantity that defines each range.arrow_forwardWhat would be the important location factors that McDonald’s might consider before opening a new restaurant?arrow_forwardAn operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow. Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5 Plot the total cost curves in a line chart and identify the range over which each location would be best.arrow_forward
- Select two organizations, one in services and one in manufacturing. What are the key factors that each organization would consider in locating a new facility? What data would you want to collect before evaluating the location options, and how would you collect the data? Explain.arrow_forwardHow can the center-of-gravity approach be used to identify the best sites for local facilities like public libraries, medical centres, and post offices? What limitations should be considered when using the system in big, congested cities?arrow_forwardSam 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 $2.85arrow_forward
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