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A Manager Must Decide Between Two Location Alternatives,Montreal and Toronto

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Essay

A manager must decide between two location alternatives,Montreal and Toronto.Montreal would have annual fixed costs of $80,000,transportation costs of $80 per unit,and labour and material costs of $70 per unit.Toronto would have annual fixed costs of $150,000,transportation costs of $20 per unit,and labour and material costs of $80 per unit.Revenue will be $250 per unit.
(i)Which alternative would yield the higher profit for an annual demand of 2,000 units?
(ii)At what volume (quantity)would the manager be indifferent in terms of which of the two locations were chosen?
What would the profit be at that volume?

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Definitions:

Stress

A physical, mental, or emotional factor that causes bodily or mental tension, potentially resulting from adverse or demanding circumstances.

Moods

Generalized positive and negative feelings or states of mind.

Work Factors

Elements or conditions in the workplace that can influence employee performance and job satisfaction.

Role Conflicts

A situation where an individual faces incompatible demands or expectations from different roles they play in their personal or professional life.

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