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The Operations Manager Has Narrowed Down the Search for a New

question 95

Essay

The operations manager has narrowed down the search for a new plant to three locations.Fixed and variable costs follow:
$\begin{array} { | c | c | c | } \hline \text { Location } & \begin{array} { c } \text { Fixed Costs } \\\text { Per Year }\end{array} & \begin{array} { c } \text { Variable Costs } \\\text { Per Unit }\end{array} \\\hline \text { A } & 70,000 & 25 \\\text { B } & 120,000 & 22 \\\text { C } & 250,000 & 17 \\\hline\end{array}$
Plot the total cost curves in the chart provided below,and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range.
$The operations manager has narrowed down the search for a new plant to three locations.Fixed and variable costs follow: \begin{array} { | c | c | c | } \hline \text { Location } & \begin{array} { c } \text { Fixed Costs } \\ \text { Per Year } \end{array} & \begin{array} { c } \text { Variable Costs } \\ \text { Per Unit } \end{array} \\ \hline \text { A } & 70,000 & 25 \\ \text { B } & 120,000 & 22 \\ \text { C } & 250,000 & 17 \\ \hline \end{array} Plot the total cost curves in the chart provided below,and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range. a.What is the break-even quantity between A and B? b.What is the break-even quantity between B and C?$
a.What is the break-even quantity between A and B?
b.What is the break-even quantity between B and C?

Definitions:

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The death penalty, also known as capital punishment, is a government-sanctioned practice whereby a person is put to death by the state as a punishment for a crime.