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chapter08_ls - for each location(A B C D in the chart on...

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Lecture Suggestions - Chapter 8 Example 3: Locational Cost-Profit-Volume Analysis 1. 2. Enter the following data: Fixed costs (250000, 100000, 150000, 200000) Variable costs (11, 30, 20, 35) 3. 4. 5. Enter Annual output (volume) = 1000 and increment = 1000 (cell D18), then use the spinner button to 6. The template also computes the exact intersections of the total annual cost lines, e.g. lines B and C intersect at annual output = 500 and lines A and C intersect at annual output = 1111.11. Therefore the 7. Select the Example 1 worksheet , delete all data. Adjust graph , if necessary, by changing start value and step value for the x-axis. Point out that the total annual cost is plotted
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Unformatted text preview: for each location (A, B, C, D) in the chart on the right. increment annual output from 1,000 to 12,000 and note the optimal location (i.e. lowest cost): location B is optimal for 0 ≤ annual output ≤ 5,000 location C is optimal for 5,000 ≤ annual output ≤ 11,000 location A is optimal for annual output ≥ 12,000 actual ranges of optimality are: location B is optimal for 0 ≤ annual output ≤ 5,000 location C is optimal for 5,000 ≤ annual output ≤ 11,111.11 location A is optimal for annual output ≥ 11,111.11 For part c, enter Volume = 8000 and note that location C has the lowest total annual cost = 310,000....
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