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Which has the lowest total cost of production

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Reference no: EM131410216

Triveni Steels (P) Ltd is planning to start a new factory for manufacturing steel utensils. It is considering three location options, namely Bokaro, Jamshedpur, and Bhilai.

The fixed costs at three locations have been estimated at Rs 8.15million, Rs 7.377million andRs 7.903, locations are million respectively. The variable costs allocations are estimated at Rs 500 per unit, 580 per unit and 490 per unit respectively.

The factory will have an annual production capacity of 10,000 steel utensils and in the initial years, it will operate at 75%efficiency. Find the best location option, Which has the lowest total cost of production.

Reference no: EM131410216

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