A) You have 3 locations whose fixed and variable costs are as shown below. What

Question

A)

You have 3 locations whose fixed and variable costs are as shown below.

What is the indifference point (units) between Location 1 and 2?

B)

The following table provides the weights and the corresponding scores for three locations.

What is the composite score of Location 1?

Loc 1 Loc 2 Loc 3 Fixed 16,563 14,665 11,398 Variable 6 11 14 You have 3 locations whose fixed and variable costs are as shown below. What is the indifference point (units) between Location 1 and 2? The following table provides the weights and the corresponding scores for three locations. What is the composite score of Location 1? A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: If the selection criteria is to be the greatest composite score, management should choose:

Explanation / Answer

a) indiffrenece point

let units be x

6x+ 16563 = 11x+ 14665

x = 380

b) composite score of location 1 = 79.69

c) management should choose location 2

Weight Loc 1 composite Labor 0.24 70 16.8 Energy 0.29 83 24.07 Raw Material 0.11 90 9.9 Taxes 0.13 88 11.44 Rent 0.23 76 17.48 79.69

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