A Certain Firm Has Four Different Operations That Must Be

question 12

Essay

A certain firm has four different operations that must be assigned to four locations.The profit (in thousands of dollars)associated with each operation at each location is presented below.The firm's vice president would like to assign the various operations so that the total profit is maximized.Find the appropriate assignments.

---

Definitions:

Opportunity Costs

The cost of forgoing the next best alternative when making a decision.

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered, and thus should not affect future business decisions.

Side-Effect Costs

Unintended expenses or losses that occur as a result of business decisions, not directly related to the project in question.

Incremental Overhead

Additional overhead costs that are incurred when an organization increases its production volume or undertakes new activities.