a. What would the cost be for each option if the demand level is 20,000 units per year? If it is 100,000 units per year? Calculate the total costs for each option if the demand level is 20,000 units per year (enter your responses as whole numbers). Demand (units per year) 20,000 20,000 Option 1 Option 2 Find the total costs for each option if the demand level is 100,000 units per year (enter your responses as whole numbers). Demand (units per year) 100,000 100,000 Option 1 Option 2 b. In general, which option do you think would be better as volume levels increase? As they decrease? Total cost (per year) Total cost (per year) O A. As volume levels increase, Option 1 will be better, since the fixed cost is lower. As volumes decrease, Option 1 will be better, as the variable cost is lower. O B. As volume levels increase, Option 2 will be better, since the fixed cost is lower. As volumes decrease, Option 2 will be better, as the variable cost is lower. OC. As volume levels increase, Option 2 will be better, since the variable cost is lower. As volumes decrease, Option 1 will be better, as the fixed cost is lower. O D. As volume levels increase, Option 1 will be better, since the variable cost is lower. As volumes decrease, Option 2 will be better, as the fixed cost is lower. c. The indifference point is units. (Enter your response rounded to the nearest whole number.)
a. What would the cost be for each option if the demand level is 20,000 units per year? If it is 100,000 units per year? Calculate the total costs for each option if the demand level is 20,000 units per year (enter your responses as whole numbers). Demand (units per year) 20,000 20,000 Option 1 Option 2 Find the total costs for each option if the demand level is 100,000 units per year (enter your responses as whole numbers). Demand (units per year) 100,000 100,000 Option 1 Option 2 b. In general, which option do you think would be better as volume levels increase? As they decrease? Total cost (per year) Total cost (per year) O A. As volume levels increase, Option 1 will be better, since the fixed cost is lower. As volumes decrease, Option 1 will be better, as the variable cost is lower. O B. As volume levels increase, Option 2 will be better, since the fixed cost is lower. As volumes decrease, Option 2 will be better, as the variable cost is lower. OC. As volume levels increase, Option 2 will be better, since the variable cost is lower. As volumes decrease, Option 1 will be better, as the fixed cost is lower. O D. As volume levels increase, Option 1 will be better, since the variable cost is lower. As volumes decrease, Option 2 will be better, as the fixed cost is lower. c. The indifference point is units. (Enter your response rounded to the nearest whole number.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section5.3: Assignment Models
Problem 12P
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