One of the Objectives of Facility Location Analysis Is to Select

question 21

Multiple Choice

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following costs should be excluded from the analysis?

• A) Historical costs
• B) Inbound distribution costs
• C) Land
• D) Construction
• E) Regional costs

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Definitions:

Contribution Format

A type of income statement presentation that separates fixed and variable costs, allowing for an easier assessment of how changes in volume affect profitability.

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Unit Sales

The total quantity of products sold within a specific period, not accounting for price or cost.