A manufacturing firm is planning to open a new factory. There are four countries under consideration: the
Question:
A manufacturing firm is planning to open a new factory. There are four countries under consideration: the USA, Canada, Mexico, and Panama. The table below lists the fixed costs and variable costs for each site. The product is mainly sold in the U.S. for $795 per unit. Location Fixed Cost Variable cost Canada $7,000,000 $210 Mexico $2,500,000 $250 USA $4,000,000 $230 Panama $1,500,000 $300 China $3,000,000 $270
a- Using cross-over analysis, find the range of products that makes each location optimal with the lowest total cost.
b- Using Excel, construct a total production cost linear graph for all 5 locations and verify cross-over points obtained in part (a). In your graph, use quantity values from 0 to 200,000 at an increment of 5,000. Use excel, please
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto