The cost infomation of an old process unit that has a capacity of 5,400 ft'/hr and a total cost of$8,500,000 is used to find the cost of a new unit that has a capacity of 8,500 t'hr. Assuming thetotal cost of the new unit is $12,000,000 you are required to state:1. The method and equation that you will use to find that cost,2. The value of the corresponding factor,3. Is the value calculated in (2) within the accepted range?

Given that, The capacity of old unit (Capacity 1) = 5,400 ft3/hrThe capacity of new unit (Capacity…

Answered: The cost information of an old process…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter4: Linear Programming Models

Section4.8: Data Envelopment Analysis (dea)

Problem 42P

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