Business, 05.05.2020 06:10 gomek

A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $187 in either case.

Omaha Kansas
Annual fixed cost ($million) 1.0 1.1
Variable cost per unit 30 45
Expected annual demand (unit) 980 11,625

Using the above information, determine what the profit would be for Kansas City

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A newly formed firm must decide on a plant location. There are two alternatives under consideration:...