ExplA hospital is evaluating whether to outsource or perform in$-$house a large set of blood and urine lab tests. The fixed cost

of the laboratory $($A$)$ located in the hospital is $300,000$ and the average variable cost per test if performed in house is

$20.$ Three third party labs $($B$,$ C & D$)$ located close to the hospital will perform the same tests and distribute the results

electronically to the hospital at a price of $10,45$ & $25$ provided the hospital will invest in fixed cost: $500,000,$

$100,000$ & $400,000$ for lab B$,$ C$,$ & D$,$ respectively.

$$ Which option is the best?

$$ Which option is the best for $15,000$ tests?ain why location decisions are important in operation management$(20$ marks$)$