Question: Locational Break-Even Analysis Method (graph provided) 2. Samantha's Sweet Maple Syrup Farm of Sherbrooke, Quebec produces a series of high-quality maple syrup in bottles and

Locational Break-Even Analysis Method (graph

Locational Break-Even Analysis Method (graph provided) 2. Samantha's Sweet Maple Syrup Farm of Sherbrooke, Quebec produces a series of high-quality maple syrup in bottles and cans. Sam Sugarmaple, owner of the company, has decided to expand one of her bottled product lines. Her current bottling and canning facility is insufficient to handle the increased workload, so the company is considering three alternatives: a new location in Trois Rivieres ("TR, for short), subcontracting to another generic syrup bottler in Victoriaville (V, for short), or expanding her existing facility in Sherbrooke ("S"). Trois Rivieres ("TR") would involve substantial fixed cost but relatively low variable cost: fixed cost would be $350,000 per year and variable cost would be $750 per pallet of syrup bottled, labelled, cased, and inspected. Subcontracting the work to Victoriaville ("V") would involve a cost per pallet of bottles equal to $2,000, but a very low fixed cost of $50,000 per year to lease the space required. Expansion at his facility in Sherbrooke ("S") would require an annual fixed cost of $150,000 and a variable cost of $1,250 per pallet of bottled maple syrup produced. a) Use the graph (attached below, see page 4) to solve this problem. b) Find the range of output for each alternative that would yield the lowest total cost. c) Which alternative would yield the lowest total cost for an expected annual quantity of 300 pallets of maple syrup? Note: while you do need to produce a graph for full marks on this question, you may solve questions b) and c) using either the graph or mathematically (algebra). Your answer for question b) here: Your answer for question c) here

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