William Green, Vice President of Manufacturing for Computer Products Corporation

question 63

Essay

William Green, vice president of manufacturing for Computer Products Corporation (CPC), and his staff are studying three Midwestern alternative locations for a new production facility for producing high-resolution scanners.His staff analysts predict that the scanners will be a growing market over the next ten years, and the analysis group shares marketing's enthusiasm for planning facilities for producing this new product line.The analysts have developed these estimates for the three locations:
The marketing department at CPC estimates sales for the scanners will be 1,000 scanners in the first year, 2,000 in the second year, and 4,000 in the third year.
a.In what range of production capacity would each of the locations be preferred?
b.Use break-even analysis to determine which location would be preferred in Years 1, 2, and 3.Which single location should be chosen and in what year will CPC break even?

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Definitions:

Goodwill Compensation

Financial compensation for intangible assets such as brand reputation, customer loyalty, and other non-physical assets that contribute to a business's value.

Environment Richness

The degree to which an environment provides the necessary resources, stimuli, and opportunities for learning and development.

Organizational Designs

The process of structuring a company's roles, responsibilities, and relationships to achieve its goals efficiently.

Economic Conditions

Refer to the prevailing state of the economy in a specific area or globally, encompassing factors like unemployment rates, inflation levels, and growth indicators.