58 669
Assignments Done
Successfully Done
In March 2018
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world’s newest programming trends.

Answer on Economics of Enterprise Question for mohamed

Question #24399
Question 2
The Blair Company’s three assembly plants are located in California, Georgia and New
Jersey. Previously, the company purchased a major subassembly, which becomes part
of the final product, from an outside firm. Blair has decided to manufacture the
subassemblies within the company and must now consider whether to rent one centrally
located facility (e.g., in Missouri, where all subassemblies would be manufactured) or to
rent three separate facilities, each located near one of the assembly plants, where each
facility would manufacture only the subassemblies needed for the nearby assembly
plant. A single, centrally located facility, with a production capacity of 18,000 units per
year, would have fixed costs of $900,000 per year and a variable cost of $250 per unit.
Three separate decentralized facilities, with production capacities of 8,000, 6,000 and
4,000 units per year, would have fixed costs of $475,000, $425,000 and $400,000,
respectively, and variable costs per unit of only $225 per
Expert's answer
For the single plant: TC = FC + VC = 900,000 +250* (6,000 + 4,500 + 3,000) = 900,000 + 3,375,000 = $4,275,000
For 3 plants: TC = FC + VC = (475,000 + 425,000 + 400,000) + 225*(6,000 + 4,500
+ 3,000) = 1,300,000 + 3,037,500 = $4,337,500
So, for current level of production a single plant is better. But if the level
increase, the current way of production is better.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


No comments. Be first!

Leave a comment

Ask Your question