An Operations Manager Has Narrowed Down the Search for a New

question 81

Multiple Choice

An operations manager has narrowed down the search for a new plant for McIntosh Enterprises to three locations.Fixed and variable costs follow: Plot the total cost curves in the chart provided and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range. Which of the following statements is CORRECT?

• A)Location C is the best one if volumes are quite low.
• B)Location A becomes the most expensive place to produce at volumes less than 10,000.
• C)The break-even quantity between A and B is less than or equal to 17,000 units.
• D)The break-even quantity between C and B is more than 30,000 units.

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Definitions:

MTBF

Mean Time Between Failures, a reliability metric that measures the average time between system failures in a process or product.

System Reliability

The probability that a system will perform its intended function without failure under stated conditions for a specified period of time.

Redundant Check

A process or mechanism that is repeated or additional, used to verify accuracy or reliability to ensure errors are minimized.

Reliability Ratings

A measure or score indicating the dependability, quality, or performance consistency of a product, system, or entity.