Table 13.8 an Operations Manager Has Narrowed Down the Search for a for a New

question 107

Multiple Choice

Table 13.8
An operations manager has narrowed down the search for a new plant for Tim! to three locations. Fixed and variable costs follow.

-An operations manager has narrowed down the search for a new plant for McIntosh Enterprises to three locations. Fixed and variable costs follow:
Plot the total cost curves in the chart provided 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.

Which of the following statements is correct?

• A) Location C is the best one if volumes are quite low.
• B) Location A becomes the most expensive place to produce at volumes less than 10,000.
• C) The break-even quantity between A and B is less than or equal to 17,000 units.
• D) The break-even quantity between C and B is more than 30,000 units.

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Definitions:

Confidence Interval

A collection of values obtained from statistical samples that is expected to encompass the value of an undetermined population parameter at a given confidence level.

Margin of Error

An expression of the amount of random sampling error in a survey's results, representing the range within which the true population parameter is expected to lie.

Margin of Error

The amount of error allowed in the results of a poll or survey, reflecting the confidence in the results.

Observations

Data collected during an experiment or research which are analyzed to gain insights and draw conclusions.