You were hired as a supply chain network optimization analyst to help the leading toy manufacturer in USA with its supply chain design strategy. You interfaced with the finance and manufacturing departments to understand different cost variables and get the cost data for each of the 4 alternatives that your firm was considering for building its next manufacturing facility. This is to address the recent surge in demand for toys. The 4 location choices for building the next plant are: A, B, C and D. Below is the cost curve that you put together based on the fixed and variable cost data from the finance and manufacturing teams.

1. What is your best location choice if the total demand is expected to stay below 10,000 and why? (5 points)

1. Which location choice represents the highest fixed cost and what is that cost in thousands of dollars? (5 points)

1. What is the breakeven point (in terms of Q, demand units) for the facility alternatives C and D? (5 points)

Based on the excellent analysis and accurate recommendation that you provided for the supply chain network design, you rose to the fame quickly and the word spread to the logistics department who was grappling with an outsourcing decision (make/buy) for one of the product lines. They provided you with the below data and asked your recommendation on the make/buy decision.

Make/Buy	Annual Fixed Costs	Variable Cost (Shipping)
Your firm (Make)	$800,000	$5.00 per ton-mile
Carter Trucking (Buy)	$350,000	$8.00 per ton-mile

Annual Fixed Costs (Your firm) = Costs of the equipment and infrastructure for the operation.

Annual Fixed Costs (Carter) = Costs of the infrastructure and management time needed to manage the contract.

1. Perform the break-even analysis and provide your make/buy recommendation to the logistics department. In other words, what will be your recommendation (make or buy) if the annual demand turns out to be i) less than the break-even qty (Q, ton-miles) and ii) greater than the break-even qty. Show your break-even calculation (15 points).