The Operations Manager Has Narrowed Down the Search for a New

question 175

Multiple Choice

The operations manager has narrowed down the search for a new plant to three locations. Fixed and variable costs follow:
$\begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\\text { per Year }\end{array} & \begin{array} { l } \text { Variable Cost } \\\text { per Unit }\end{array} \\\hline \mathrm { A } & \$ 75,000 & \$ 31 \\\mathrm {~B} & 250,000 & 12 \\\mathrm { C } & 300,000 & 15 \\\hline\end{array}$
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.
$\begin{array}{l}\text { Anmul }\\\begin{array} { c } \text { Cost } \\( \$ 000 ) \end{array}\end{array}$
Which of the following statements is correct?

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Definitions:

Real Estate Bubble

A real estate bubble is a situation in which property prices rapidly inflate beyond fundamental valuations, typically followed by a sharp decline.

Stock Market Crash

A rapid and often unanticipated decline in stock prices across a significant cross-section of a stock market, leading to a loss of paper wealth.

Terrorist Attacks

Acts of violence carried out by individuals or groups with the intent to cause fear, disruption, or political change.

Business Leaders

Individuals who are at the forefront of making decisions, guiding strategies, and steering the operations and future direction of a business or organization.