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Location strategies

The Quick Copy center for document copying is deciding where to locate a new facility. The annual fixed and variable costs for each site it is considering have been estimated as follows:

Location Fixed Costs Variable Costs

A $85,000 $2/unit
B $49,000 $7/unit
C $35,000 $10/unit
D $65,000 $6/unit

If demand is expected to be 3000 units, calculate the total costs.

Total Cost A = $

Total Cost B = $

Total Cost C = $

Total Cost D = $

Which location is best?

A

B

C

D

Solution Preview

a. If demand is expected to be 3000 units, calculate the total costs.

Volume needed=3000 ...

Solution Summary

Solution determines the appropriate location in the given case.

$2.19