Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 8, Problem 1P
Summary Introduction
To determine: The location that would produce greater profit.
Introduction: Location is where a firm chooses to site its operations. Location decisions can have large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.
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A newly 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 theraw materials will result in lower fixed and variable costs than locating near the market, but theowners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $185 in either case. Using the following information, determinewhich location would produce the greater profit.Omaha Kansas CityAnnual fixed costs ($ millions) $1.2 $1.4Variable cost per unit $36 $47Expected annual demand (units) 8,000 12,000
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Chapter 8 Solutions
Operations Management
Ch. 8.6 - Prob. 1RQCh. 8.6 - Prob. 2RQCh. 8 - Prob. 1DRQCh. 8 - Prob. 2DRQCh. 8 - Prob. 3DRQCh. 8 - Prob. 4DRQCh. 8 - Prob. 5DRQCh. 8 - Prob. 6DRQCh. 8 - Prob. 7DRQCh. 8 - Prob. 8DRQ
Ch. 8 - Prob. 9DRQCh. 8 - Prob. 1TSCh. 8 - Prob. 2TSCh. 8 - Prob. 3TSCh. 8 - Prob. 1CTECh. 8 - Prob. 2CTECh. 8 - Prob. 3CTECh. 8 - Prob. 4CTECh. 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. 1CQ
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