Question: 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

You were hired as a supply chain network

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. B 1,600 1,400 (20, 1,390) (20, 1,200) (20, 1,060) 1,200 D 1,000 (20, 980) Annual cost (thousands of dollars) 800 600 Break-even point 400 Break-even point 200 1 10 1 20 0 1 61 8 6.25 1 22 2 4 1 12 142 16 14.3 18 Q (thousands of units) a) What is your best location choice if the total demand is expected to stay below 5,000 and why? b) What is your best location choice if the total demand is expected to be around 16,000 and why? (5 points) c) What is the breakeven point (in terms of Q, demand units) for the facility alternatives C and D? (5 points)

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