Question

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 $65,000 for Memphis, $75,000 for Biloxi, and $110,000 for Birmingham. Labor and materials are expected to be $9 per unit in Memphis, $6 per unit in Biloxi, and $6 per unit in Birmingham. The Memphis location would increase system transportation costs by $64,000 per year, the Biloxi location by $74,500 per year, and the Birmingham location by $26,000 per year. Expected annual volume is 15,000 units.

	Total Cost
Memphis
Biloxi
Birmingham

Answer 1

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