Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of$14,000 per standard unit produced. McKinney would have annual fixed costs of $920,000 and variable costs of$13,000 per standard unit. The finished items sell for $29,000 each. What is the relevance of break-even points for these cities?

Hyundai Motors is considering three sites- A, B, and C - at which to locate a factory to build its new-model automobile, the Hyundai Sport C150. The goal is to locate at a minimum cost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data:

The firm knows it will produce between 0 and 60,000 Sport C150s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans. What volume indicates site A is optimal?

Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Given the following costs:

Perform an analysis of the volume over which each location is preferable.

The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown:

For a production of 200 units, which site is best?

An American consulting firm is planning to expand globally by opening a new office in one of four countries: Germany, Italy, Spain, or Greece. The chief partner entrusted with the decision, L. Wayne Shell, has identified eight key success factors that he views as essential for the success of any consultancy. He used a rating system of 1 (least desirable country) to 5 (most desirable) to evaluate each factor.

If Spain's score were lowered in the Stability of government factor, to a 4, how would its overall score change? On this factor, at what score for Spain would the rankings change?