Sie 565 Hw.3 Case 3.2 Reham Al-Bakri University Of Arizona

This study source was downloaded by 100000859819779 from CourseHero.com on 02-05-2023 05:08:49 GMT -06:00https://www.coursehero.com/file/186618037/HW3pdf/ HW.3 CASE 3.2 Reham Al-Bakri Question One If I were Skip Grenoble for I will choose to implement air method short term as its has lower total cost until certain point in demand we need to switch for ocean method especially with expected year to year growth, during the third year the total cost will be less at certain quantity in demand. I chose this based on short run and long run static analysis which based variable cost change as fixed cost will not be changed, variable cost will be lower with high demand. Question two Ocean Air Demand 2,500,000 Total Cost 823,000 800,000 Fixed Cost 600,000 450,000 Var Cost 223,000 350,000 Var cost per each = var cost/demand 0.0892 0.1400 So for both ways will cost will be same at point that demand as below because the fluctuation in demand is changing the variable cost which impacted the total cost 600 + 0.892X = 450 + 0.14 x X is equal 2,952,756 Ibs (demand which will make both ways are equal) Ocean Air Demand 2,500,000 Total Cost 823,000 800,000 Fixed Cost 600,000 450,000 Var Cost