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    Operation management

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    The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown.

    Site Fixed Cost per Year Variable Cost per Unit

    1 $ 500 $ 11
    2 $ 1,000 $ 7
    3 $ 1,700 $ 4

    A. Over what range of production is each location optimal?

    B. For a production of 200 units, which site is best?

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    Solution Summary

    Solution shows optimal location for different range of production.