6. The operations manager for Fine Foods Distribution has narrowed the search for a new facility...

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6. The operations manager for Fine Foods Distribution has narrowed the search for a new facility to seven communities. Fixed costs (land, buildings, and equipment) and variable costs (labour, materials etc.) are shown below. 15 marks Distribution Centre Costs Community Fixed Costs (Smillions) Aurora $1,600 Variable Costs ($) 17 Boulder 2,000 12 Cranbrook 1,500 16 Deerfield 3,000 10 Essex 1,800 15 Farber 1,200 15 Grafton 1,700 14 a. Which of the communities can be eliminated from further consideration because they are dominated (both variable and fixed costs are higher) by another community? b. Plot the total cost curves for all remaining communities on a single graph. Identify on the graph the approximate range over which each community provides the lowest cost. c. Using locational break-even analysis, calculate the break-even quantities to determine the range over which each community provides the lowest cost. 6. The operations manager for Fine Foods Distribution has narrowed the search for a new facility to seven communities. Fixed costs (land, buildings, and equipment) and variable costs (labour, materials etc.) are shown below. 15 marks Distribution Centre Costs Community Fixed Costs (Smillions) Aurora $1,600 Variable Costs ($) 17 Boulder 2,000 12 Cranbrook 1,500 16 Deerfield 3,000 10 Essex 1,800 15 Farber 1,200 15 Grafton 1,700 14 a. Which of the communities can be eliminated from further consideration because they are dominated (both variable and fixed costs are higher) by another community? b. Plot the total cost curves for all remaining communities on a single graph. Identify on the graph the approximate range over which each community provides the lowest cost. c. Using locational break-even analysis, calculate the break-even quantities to determine the range over which each community provides the lowest cost.