A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:

-Over what output range would Albany as a site be preferred?
A)Between 0 and 16,666 units
B)Between 16,667 and 33,333 units
C)Between 33,334 and more units
D)The three sites have exactly the same total costs.
E)Do not have enough information to compute

Question

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:
 
-Over what output range would Albany as a site be preferred?
A)Between 0 and 16,666 units 
B)Between 16,667 and 33,333 units 
C)Between 33,334 and more units 
D)The three sites have exactly the same total costs. 
E)Do not have enough information to compute

Quizplus · Accepted Answer

Albany would be preferred for output between 0 and 16,666 units because it likely has lower fixed costs or variable costs that make it more cost-effective within this range compared to other sites.

A Major Packaging Company Is Interested in Establishing a Centralized