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?
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a. If demand is expected to be 3000 units, calculate the total costs.
Volume needed=3000 ...
Solution determines the appropriate location in the given case.