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ACC 300 Assignment 8

ACC 300 Assignment 8

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Author: Trudy Webb
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1. Problem 8-6
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information:  Annual costs  for building,  equipment,  and  administration  would  be  $42,400 for Memphis,
$60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per  year,  and  the  Birmingham  location by $27,200 per year. Expected annual volume is 13,000 units.(Omit  the  "$"  sign  in  your response.)
2. Problem 8-7
A retired  auto  mechanic  hopes  to  open  a  rustproofing  shop.  Customers  would  be  local  new-car  dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,820 and labor,  materials, and transportation costs of $30        per car. The outside location would have fixed monthly costs of $4,500  and  labor,  materials,  and  transportation costs of $40 per car. Dealer price at either location will be $90 per car.
 
Which location will yield the greatest profit if monthly demand is (1) 200 cars? (2) 300 cars?
3. Problem 8-9
         Location Score       
Factor

(100 points each)

Weight

A

B

C

Convenience

.15

81

91

66

Parking facilities

.20

70

98

97

Display area

.18

89

89

93

Shopper traffic

.27

88

89

82

Operating costs

.10

96

87

97

Neighborhood

.10

85

91

81

1.00

 
 
 
 a.   Using the above factor ratings, calculate the composite score for each location. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
4. 
Problem 8-10
Factor

 
Weight

 
East #1

 
East #2

 
West

Initial cost

10

130

130

100

Traffic

10

40

60

55

Maintenance

5

20

15

17

Dock space

6

18

17

24

Neighborhood

3

9

7

14

 
Using the above factor ratings, calculate the composite score for each location
 


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