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Modern equipment and can process shipments at a cost

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Reference no: EM132168363

Question: You have two alternatives for a distribution center

Both facilities generate $50 of revenue per shipment

Facility A has a fixed cost of $1.2M to acquire, and can process shipments at $20/shipment

Facility B has a fixed cost of $2.0M to acquire, but has modern equipment and can process shipments at a cost of $10 / shipment.

If the forecast is 80,000 units:

a) Facility B is the best choice

b) both choices are equally good

c) Facility A is the best choice

d) Neither is a good choice

Reference no: EM132168363

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