Table 13.8 an Operations Manager Has Narrowed Down the Search for a for a New

question 40

Multiple Choice

Table 13.8
An operations manager has narrowed down the search for a new plant for Tim! to three locations. Fixed and variable costs follow.

-Use the information in Table 13.8 to determine the best statement.

• A) Location C is the best one if volumes are quite high.
• B) Location A becomes the most expensive place to produce at volumes in excess of 2,000.
• C) The break-even quantity between A and B is less than or equal to 5,000 units.
• D) The break-even quantity between C and B is more than 30,000 units.

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Definitions:

Managing Constraints

The methodical process of identifying, analyzing, and addressing limitations that hinder achieving objectives in operations or projects.

Break Even

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business.

Capacity Alternatives

Different options or strategies a business may consider to adjust or increase its capacity to meet demand.