C Page view A Read aloud 1 Add text V Draw Klingon Specialties Mfg. Ltd. Klingon Specialties Mfg. Ltd. has expanded rapidly to near capacity levels. It is close to turning down widget bearing orders. Bipin Smythe, the owner, thinks the time has come to search for an international manufacturing location. Three locations head the list, Option 1 - Reversistan, Option 2 - the Fiefdom Principality, and Option 3 - Serf's Democratic Republic. Some hard costs were simple to arrive at but an estimate had to be made for labour. First year requirements would be 15,000 units. Known costs are: Potential Fixed Cost Variable Cost per unit - CDNS Locations CDNS per year Materials Overhead Option 195,000 0.20 0.40 Option 2 175,000 0.25 0.75 Option 3 165,000 0.95 0.95 It was estimated the labour skills available in cach location would permit the following production out puts: Locations Units per hour Cost per hour - CDNS Option 1 8 3.20 Option 2 12 8.40 Option 3 10 10.00 Although the international locations are separated geographically. Bipin Smythe, the owner and CEO, has determined the container load transportation costs and travel time are essentially equal; hence, can be ignored in any calculations. Smythe has visited each location and is satisfied with what he saw. In spite of that, Smythe has concems if he has considered all the relevant factors in location selection. He has heard rumours about each location but is unsure which are the important factors and questionable factors that might improve in time. He has presented this problem to you saying that all three locations are viewed as developing small nations with People's Democratic Republic the most developed and Reversistan the least. The development gaps are not great but measurable. Smythe does hope to expand into other international markets when the time is right, Deliverables: 1. Produce a graph with total cost lines for each location. Marks 2 Tip: Scale (Yaxis) should be "rimes exis7000 2. Calculate the crossover points for options 12.2 vs 3. and I 3. Marks 5 3: What is the best location for costs overall Marks 1 # What should be Smythe's main three concerns that might apply for the locations Marke - 2 DELL