note ( I need only F, G and H)

A manufacturer company preparing to build a new plant is considering three potential locations- Ampang, Gombak Setia and Seremban- for a new plant. Cost studies indicated that fixed costs per year at the sites are $2,500,000.00; $2,000,000.00 and $3,500,000.00, respectively and the material costs are $8, $10 and $6 respectively. The labour cost for each, $8, $8 and $5 respectively and the overhead, $5, $7 and $ 4 respectively.

a) Show a table for all the costs(fixed cost and variable cost) in the scenario above

b) Write out the equation for total cost for each location

c) For what range of the location for Ampang is the lowest-cost choice.

d) For what range of the location for Gombak Setia is the lowest-cost choice.

e) For what range of the location for Seremban is the lowest-cost choice.

f) Is any alternative never preferred? Explain.

g) Graph the total-cost line for the three potential sites.

h) JIT partnerships exist when a supplier and purchaser work to achieve the goals of JIT partnership. Explain the four(4) goals with clear examples.

(Q 1).

Variable cost = Material costs + Labor costs + Overhead costs

Location	Fixed costs	Variable Costs
Ampang	$ 2,500,000	$ 21
Gombak Setia	$ 2,000,000	$ 25
Seremban	$ 3,500,000	$ 15

(Q 2).

Let Quantity = Q

Total cost = Fixed cost + (Variable cost Quantity)

Total cost for Ampang = 2,500,000 + 21Q

Total cost for Gombak Setia = 2,000,000 + 25Q

Total cost for Seremban = 3,500,000 + 15Q

(Q 3).

At the cross over point of Ampang and Gombak Setia:

Total cost for Ampang = Total cost for Gombak Setia

2,500,000 + 21Q = 2,000,000 + 25Q

Q = 125,000 units

Similarly,

At the cross over point of Gombak Setia and Seremban:

Total cost for Gombak Setia = Total cost for Seremban

2,000,000 + 25Q = 3,500,000 + 15Q

Q = 150,000 units

Therefore,

Location	Optimal Quantity Range
Ampang	125,000 Q 150,000
Gombak Setia	Q 125,000
Seremban	Q 150,000

Therefore,

Ampang is optimal lowest cost choice for quantity between 125,000 and 150,000 units.

(Q 4).

Gombak Setia is optimal lowest cost choice for quantity below 125,000 units.

(Q 5).

Seremban is optimal lowest cost choice for quantity above 150,000 units.