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A newly formed firm must decide on a production facility location. There are three alternatives under consideration: (A) locate near the raw materials, (B) locate with the best access to transportation infrastructure, or (C) locate near the consumer market. Locating near the raw materials would lead to a lower fixed and variable cost than near the customer market. However, the owners believe that there would be a loss in sales volume since customers prefer local suppliers. At location A, they would only sell/produce 8,000 units as compared to location C where they expect to sell/produce 12,000 units. Locating near transportation infrastructure would result in the lowest fixed cost but the highest variable cost and a sales/production of 10,000 units. Suppose that your product sells for $185 per unit (this is revenue). The costs per location are as follows:
Location A: has a fixed cost of $1,200,000 and a variable cost of $36 per unit Location B: has a fixed cost of $1,000,000 and a variable cost of $62 per unit Location C: has a fixed cost of $1,400,000 and a variable cost of $47 per unit
B. Based on the expected production/sales at each of the three locations, which will generate the highest PROFIT?
Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..
Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..
Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..
An analysis of the holding costs, including the appropriate annual holding cost rate.
Briefly explain Evolution and contributor of Operations management.
A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..
Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.
Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.
Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.
Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.
Ccompare the effectiveness of different leadership styles in different organizations
Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.
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