Problem 8-6
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL.
Prepare an economic analysis of the three locations given the following information:
Annual costs for building, equipment, and administration would be $34,000 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham.
Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham.
The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $27,200 per year. Expected annual volume is 10,200 units.(Omit the "tiny_mce_markerquot; sign in your response.)