Part II- Problems and Essay -Answer two (2) questions in this part (36 points) 1- Break Even Analysis

A company is seeking to expand and set up a new facility. The top executives would like to make a decision based on cost and choose one from three candidate cities.

Candidate City	Fixed cost per year ($)	Variable Cost ($)
Iowa City	$150,000	$82.00
Des Moines	$200,000	$53.00
Indianapolis	$550,000	$37.00

If expected production volume is 10,000 units per year, which location is most cost effective?

2- Aggregate Planning Strategy

An auto parts manufacturer supplies to several automakers and has the following numbers for monthly demand from automakers.

Month	Demand	# Production Days
January	250	22
February	400	18
March	180	20
April	85	21
May	555	20
June	375	22

Calculate the inventory carrying implications of following a level strategy.