A Company Currently Has Two Factories: F1 and F2,and Three

question 2

Essay

A company currently has two factories: F1 and F2,and three retail outlets: R1,R2,and R3.The shipping costs per unit along with the monthly capacity and demand requirements are summarized below:
$\begin{array}{l}\text { Shipping Cost Per Unit }\\\begin{array}{lllll}& \mathrm{R} 1 & \mathrm{R} 2& \mathrm{R} 3&\text { Supply } \\\text { F1 } &\$3&\$2&\$4&100\\\text { F2 } & \$ 1 & \$ 3 &\$5&200 \\\text { Demand } & 100 & 100 & 200 &\end{array}\end{array}$
The firm has decided to build a new factory to expand its productive capacity.The two sites being considered are Philadelphia and Pittsburgh.The estimated shipping costs for the new factories along with their estimated fixed cost and production capacity are summarized below:

Which of the new locations will yield the lowest cost in combination with the existing factories and retail outlets?

Understand the aspects of the marketing mix and its application in targeting the correct audience.

Learn about brand building through simplicity and strong associations.

Identify the role of promises and personal branding in establishing customer trust and loyalty.

Develop an understanding of pricing strategies and market research for optimal pricing.

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Definitions:

Departmental Overhead Rate Method

An accounting method used to allocate overhead costs to specific departments based on relevant activity bases.

Overhead Resources

The ongoing operational costs required to run a business that are not directly tied to a specific product or service, such as rent, utilities, and general office supplies.

Activity Pool

A concept in cost accounting used to gather all costs associated with a certain activity, facilitating more accurate cost allocation.

Activity-based Costing Method

A costing method that assigns costs to products or services based on the activities they require, aiming for more accurate allocation of overheads.