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Operation management

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?

Solution Summary

Solution shows optimal location for different range of production.

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