John Bros, owner of a spark plug manufacturing facility, is looking to expand his production capacity. He

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John Bros, owner of a spark plug manufacturing facility, is looking to expand his production capacity. He is considering three locations A, B, and C for the construction of a new plant. The company wishes to find the most economical location for an expected volume of 2,500 units per year. Bros calculates that the fixed costs per year at each of the sites amount to $25,000, $50,000, and $100,000 respectively. The variable cost is $70 per unit, $40 per unit and $20 per unit respectively. The expected selling price for each spark plug is $120. Find the preference volume for each location.
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Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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