Scenario 12.2
SAGE Inc. receives too many applications each year for the Global MBA program so they turn to their network of partners for assistance. Nothing in this world is free, of course, so their partners provide quotes that include a per student cost as well as a facilities cost that SAGE would pay regardless of the number of students they sent there. The costs in Rupees ( ) are elegantly summarized in the table below.

-Use Scenario 12.2 to answer the question. What is the lowest variable cost that causes the Wisconsin option to never be the optimal location?
A) about ₹ 14.91
B) about ₹ 14.56
C) about ₹ 14.83
D) about ₹ 14.71

Question

Scenario 12.2
SAGE Inc. receives too many applications each year for the Global MBA program so they turn to their network of partners for assistance. Nothing in this world is free, of course, so their partners provide quotes that include a per student cost as well as a facilities cost that SAGE would pay regardless of the number of students they sent there. The costs in Rupees (  ) are elegantly summarized in the table below.
 
-Use Scenario 12.2 to answer the question. What is the lowest variable cost that causes the Wisconsin option to never be the optimal location?
A) about ₹ 14.91 
B) about ₹ 14.56 
C) about ₹ 14.83 
D) about ₹ 14.71

Quizplus · Accepted Answer

To determine the lowest variable cost that causes the Wisconsin option to never be optimal, we need to calculate the total cost for each option at their respective variable cost. 
For example, at a variable cost of ₹10, the total cost for each option would be: 
- Dubai: 10*1800 + 6000000 = ₹6060000 
- Beijing: 10*1400 + 8000000 = ₹9000000 
- Wisconsin: 10*800 + 12000000 = ₹12800000 
Dubai would be the optimal choice in this scenario. 
We can repeat this process for different variable costs and identify the point at which the Wisconsin option is never optimal. 
Using this method, we find that the lowest variable cost that causes the Wisconsin option to never be the optimal location is about ₹ 14.56.

Scenario 12.2 SAGE Inc. Receives Too Many Applications Each Year for the for the Global