DSCI 304 Study Guide - Midterm Guide: Variable Cost

• School: College of Charleston
• Department: Decision Sciences
• Course: DSCI 304
• Professor: Hartley

Document Summary

Why do location decisions need to happen: addition of new facilities. =>as part of a marketing strategy to expand markets. => growth in demand that cannot be satisfied by expanding existing facilities: depletion of basic inputs requires relocation, shift in markets, cost of doing business at a particular location makes relocation attractive. Location decisions: are closely tied to an organization"s strategies ex. Effect investment requirements, operating costs, revenues, and operations. Existing companies generally have four options available in location planning: expand an existing facility, add new locations while retaining existing facilities, shut down one location and move to another, do nothing. Benefits of having globalized operations or locations worldwide. General procedure for deciding where to locate a facility. Locational cost-profit-volume analysis: technique for evaluating location choices in economic terms. Determine the fixed and variable costs for each alternative. Plot the total-cost lines for all alternatives on the same graph.