A chain restaurant wants to open a new location. It is considering three (3) potential sites forthe new restaurant. One location is downtown, the other location is in the suburbs and thefinal location is at the city limits. The downtown location will have monthly fixed costs of$9,500 and labor and materials at $3.75 an order. The suburb location will have a monthlyfixed cost of $8,200 and labor and materials at $3.00 an order. The city limits locations willhave a monthly fixed cost of $5,500 and labor and materials at $3.85 an order. The averageprice per order is $15.50A. The restaurant chain's business analyst is using three different demand levels for eachlocation 1,000 units, 800 units and 500 units. Determine the profitable of each potentiallocation using each of the demand levels.B. At what demand level is each potential location most profitable?C. At what demand level is each potential location least profitable?

Total Profit = Total Revenue - Total CostTotal Cost = Fixed cost + Variable costVariable cost =Labor…

Answered: A chain restaurant wants to open a new…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 10P

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not certain how to calculate because it says each item sells for 17,000. also, I wouldnt be sure which numbers to graph with 1. A small producer of machine tools wants to move to a larger building, and has identified twoalternatives. Location A has annual fixed costs of $800,000 and variable costs of $14,000 perunit; location B has annual fixed costs of $920,000 and variable costs of $13,000 per unit1.The finished items sell for $17,000 each.A) State the total-cost formula:B) Calculate a second point for each location: Set a selected quantity = ____ Use q=150 units C) Sketch the total-cost lines for the locations on a single graph.
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