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 $49,000 for Memphis, $59,000 for Biloxi, and $94,000 for Birmingham. Labor and materials are expected to be $9 per unit in Memphis, $3 per unit in Biloxi, and $3 per unit in Birmingham. The Memphis location would increase system transportation costs by $48,000 per year, the Biloxi location by $58,500 per year, and the Birmingham location by $24,400 per year. Expected annual volume is 13,400 units.

Question

05-01-2021
Business

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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 $49,000 for Memphis, $59,000 for Biloxi, and $94,000 for Birmingham. Labor and materials are expected to be $9 per unit in Memphis, $3 per unit in Biloxi, and $3 per unit in Birmingham. The Memphis location would increase system transportation costs by $48,000 per year, the Biloxi location by $58,500 per year, and the Birmingham location by $24,400 per year. Expected annual volume is 13,400 units.

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