Question: A firm that has recently experienced enormous growth is seeking
A firm that has recently experienced enormous growth is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $ 40,000 for Memphis, $ 60,000 for Biloxi, and $ 100,000 for Birmingham. Labor and materials are expected to be $ 8 per unit in Memphis, $ 4 per unit in Biloxi, and $ 5 per unit in Birmingham. The Memphis location would increase system transportation costs by $ 50,000 per year, the Biloxi location by $ 60,000 per year, and the Birmingham location by $ 25,000 per year. Expected annual volume is 10,000 units.
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