Question: 4. The fixed and variable costs for 2 potential plant sites for a ski equipment manufacturer are shown below. Site Fixed Cost Per year Variable

4. The fixed and variable costs for 2 potential plant sites for a ski equipment manufacturer are shown below. Site Fixed Cost Per year Variable Cost Per Unit Atlanta $200 $6 Burlington $500 $5 Cleveland $1000 $4 (a) Graph the total cost lines for the three potential sites (Note that you must show 2 intersection points on the graph). (3 points) (b) Over what range of annual volume is each location the preferable one? (You must derive how to find the intersection points mathematically). (2 points) (c) If expected volume is 250 units, which location would you recommend?

subject: product/operation management

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