MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Sustainability and Supply Chain Management
12th Edition
ISBN: 9780134165325
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Question
Chapter 8, Problem 17P
a)
Summary Introduction
To Perform: A volume analysis.
b)
Summary Introduction
To determine: The change in answer.
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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
Detroit
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$30/radio
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Variable costs
$22/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
radios.
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22,500
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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
Brian Trump has obtained fixed- and variable-cost information for four potential sites for his professional wrestling school and summarized it in tabular form below. All values are in dollars.
Site
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Variable Cost
A
10,000
24
B
12,000
20
C
14,000
18
D
16,000
17
Brian plans to charge the same amount for tuition regardless of where he decides to establish his school. If he believes that 700 students will matriculate each year, which site will result in the lowest total cost?
Chapter 8 Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Sustainability and Supply Chain Management
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 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. 1CSCh. 8 - Prob. 2CSCh. 8 - Prob. 3CSCh. 8 - Prob. 4CSCh. 8 - Prob. 1.1VCCh. 8 - Prob. 1.2VCCh. 8 - Prob. 1.3VCCh. 8 - Prob. 2.1VCCh. 8 - Prob. 2.2VCCh. 8 - Prob. 2.3VCCh. 8 - Prob. 2.4VC
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