Discussion:
Q: Location Cost Volume Analysis
|
Location
|
Fixed Cost per Year
|
Variable Cost per Unit
|
|
A
|
$250,000
|
$11
|
|
B
|
100,000
|
30
|
|
C
|
150,000
|
20
|
|
D
|
200,000
|
35
|
Give the above information
Identify the range of output for which each alternative is superior (i.e. has the lowest total cost)
If the expected output at the selected location is to be 8,000 units per year, which location would provide the lowest total cost
Factor Rating/Scoring
A CD vending business intends to open a new branch store. The following table provides information on two competing locations. Which alternative is better?
|
|
Scores (Out of 100)
|
|
Factor
|
Weight
|
Alt 1
|
Alt 2
|
|
Proximity to existing store
|
.10
|
100
|
60
|
|
Traffic volume
|
.05
|
80
|
80
|
|
Rental costs
|
.40
|
70
|
90
|
|
Size
|
.10
|
86
|
92
|
|
Layout
|
.20
|
40
|
70
|
|
Operating costs
|
.15
|
80
|
90
|
Center of Gravity
Given the following shipping information determine the center of gravity
|
Destination
|
X
|
Y
|
Weekly Quantity
|
|
D1
|
2
|
2
|
800
|
|
D2
|
3
|
5
|
900
|
|
D3
|
5
|
4
|
200
|
|
D4
|
8
|
5
|
100
|
|
|
|
2,000
|
|
|
|
|