A Manufacturing Company Is Considering Two Alternative Locations for a New

question 86

Essay

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive?
If the company plans on producing 50,000 units, which location would be more attractive?
$$\begin{array} { | l | c | c | } \hline & \text { Glen Rose } & \text { Mesquite } \\\hline \text { Fixed Costs } & \$ 1,000,000 & \$ 1,500,000 \\\hline \text { Variable Costs } ( \$ \text { per unit) } & 25 & 23 \\\hline\end{array}$$

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Definitions:

Customers

Individuals or entities that purchase goods or services from a business, playing a critical role in the business's success.

Simulation Results

The data or outcomes obtained from running simulations, representing possible scenarios or behaviors of a system under study.

Final Number

The conclusive or ultimate figure that results from a series of calculations, measurements, or operations.

Customers

Individuals or entities that purchase goods or services produced by a business.