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Calibri 11 - A A = & Cut La Copy Format Painter ap Wrap Text General HI Paste BIU Merge Center $ % Conditional Form Formatting - Table Clipboard Font Alignment Number 116 B c D E F G H 1 4 5 6 A small fertilizer company is looking for a place to store is fertilizers and pesticides. The manager still has to decide how much square footage of storage he needs as there is some leeway to change the inventory turn-over-ratio to adjust how much storage would be needed. Therefore, at this point, he only needs to evaluate in what range, each of his storage location is optimal? Option A: rent an existing warehouse in the city which charges $6 per square foot but there is no fixed cost Option B: buy and renovate an existing warehouse at a cost of $100,000 and the variable cost in that area is $5 per square foot Option : Buy land and construct a warehouse at $250,000 and the variable operating cost is $2 per square foot Over what range of square footage, each option is a better one? 7 8 9 10 11 12 13 15 16 17 DATA location Var cost 18 19 A B Fixed cost 0 100000 250000 6 5 2 $800,000.00 20 $700,000.00