Determine which city provides the lowest overall costs

Reference no: EM13205420

Wiebe Trucking, Inc., is planning a new warehouse to serve the western United States. Denver, Santa Fe, and Salt Lake City are under consideration. For each location, annual fixed costs (rent, equipment, and insurance) and average variable costs per shipment (labor, transportation, and utilities) are listed in the following table. Sales projections range from 550,000 to 600,000 per year. Location Annual Fixed Cost Variable Cost per Shipment Denver $5,000,000 $4.65 Santa Fe $4,200,000 $6.25 Salt Lake City $3,500,000 $7.25

a. Plot the total cost curves for all the locations on a single graph.

b. Which city provides the lowest overall costs?

Reference no: EM13205420

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