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The Owner of a Millwork Shop Is Considering Three Alternative

question 81

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The owner of a millwork shop is considering three alternative locations for a new plant for building embossed-and-clad steel exterior doors for residences. Fixed and variable costs follow. Since the plant ships nationwide, revenue is assumed the same regardless of plant location. Plot the total cost lines in the chart provided below, and identify the range over which each location is best.
$\begin{array} { | l | c | c | c | } \hline & { \text { Location } } \\\hline \text { Costs } & \mathrm { A } & \mathrm { B } & \mathrm { C } \\\hline \text { Fixed } & \$ 700,000 & \$ 1,000,000 & \$ 1,1000,000 \\\hline \text { Variable } & \$ 28 & \$ 18 & \$ 20 \\\hline\end{array}$
$The owner of a millwork shop is considering three alternative locations for a new plant for building embossed-and-clad steel exterior doors for residences. Fixed and variable costs follow. Since the plant ships nationwide, revenue is assumed the same regardless of plant location. Plot the total cost lines in the chart provided below, and identify the range over which each location is best. \begin{array} { | l | c | c | c | } \hline & { \text { Location } } \\ \hline \text { Costs } & \mathrm { A } & \mathrm { B } & \mathrm { C } \\ \hline \text { Fixed } & \$ 700,000 & \$ 1,000,000 & \$ 1,1000,000 \\ \hline \text { Variable } & \$ 28 & \$ 18 & \$ 20 \\ \hline \end{array}$

Definitions:

Flexible Organizational Structure

An adaptable configuration within an organization that facilitates response to changes in the environment or internal demands.

Span of Control

The number of individuals or resources one manager or leader directly supervises or oversees.

Formalization

The extent to which an organization's policies, procedures, job descriptions, and rules are written and explicitly articulated.

Creativity

The ability to produce original and valuable ideas or solutions.