6. Cunningham Products is evaluating five possible locations to build a distribution center. Data estimated from the accounting department are provided below. The annual production is estimated to be 30,000 units.
-
Which location provides the least cost?
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For what range of demand would each location be best?
|
Data |
Location 1 |
Location 2 |
Location 3 |
Location 4 |
Location 5 |
|
Fixed cost |
75000.00 |
110000.00 |
95000.00 |
125000.00 |
110000.00 |
|
Direct Material cost/unit |
4.14 |
4.65 |
5.05 |
4.50 |
4.50 |
|
Direct Labor cost/unit |
12.45 |
13.80 |
11.80 |
15.60 |
13.75 |
|
Overhead/unit |
2.25 |
2.60 |
1.95 |
2.75 |
2.10 |
|
Transportation cost/unit |
.50 |
.65 |
.30 |
.83 |
.67 |
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