A Manufacturing Firm Is Considering Two Locations for a Plant

question 1

Multiple Choice

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l c c } \text { Location } & \mathrm { FC } \text { (annual) } & \mathrm { VC } \text { (per unit) } \\\hline \text { Atlanta } & \$ 80,000 & \$ 20 \\\text { Phoenix } & \$ 140,000 & \$ 16\end{array}$$ What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?

• A) $280,000
• B) $140,000
• C) $220,000
• D) $300,000
• E) $156,000

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Definitions:

Social Decision Scheme

A method or rule used by groups to aggregate individual preferences or opinions to reach a collective decision.

Discussion To Consensus

involves engaging in a dialogue with the goal of reaching an agreement or mutual understanding among all participants.

Planning Fallacy

A cognitive bias where people underestimate the time, costs, and risks of future actions while overestimating the benefits, leading to overly optimistic project timelines.

Fair Procedures

Practices and policies that are impartial, equitable, and just in decision-making processes or dispute resolutions.