Operations management question

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Reference no: EM1377098

A company is trying to decide in two location options, Albany and Baltimore. Albany would result in yearly fixed costs of $60,000, labor costs of $7 per unit, material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit of $50. Baltimore would have annual fixed costs of $80,000, labor costs of $6 per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48.

(A) At an annual volume of 9,000, which would yield the higher profit?

(B) At what annual volume would management be indifferent between the two alternatives in terms of annual profits?

Reference no: EM1377098

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