Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour.
-Refer to the scenario above.Which is the optimum location for the firm to set up its factory?
Definitions:
MPP
"MPP" is typically understood as "Marginal Physical Product," which refers to the additional output resulting from the use of one more unit of a variable input, holding all other inputs constant.
MRP
Material Requirements Planning (MRP) is a system for planning production, scheduling activities, and controlling inventory used in overseeing manufacturing operations.
MPP
Marginal Physical Product, the additional output resulting from the use of one more unit of a variable input, holding all other inputs constant.
MRP
Marginal Revenue Product; the additional revenue generated from employing one more unit of a resource or factor of production.
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