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  • (Test, Apr 2012) : MEM575 / Location: Past Questions

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    محمد لطفي
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    The document discusses two potential production locations (Location A and Location B) for a company and compares their fixed and variable costs. Location A has fixed costs of RM870,000 and variable costs of RM50 per unit, while Location B has fixed costs of RM620,000 and variable costs of RM70 per unit. The selling price is RM170 per unit. It asks to determine which location should be chosen for a forecasted production of 20,000 units per year, and the production quantity needed at each location to earn a profit of RM120,000. It also asks at what production quantity the profits would be equal at both locations.

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    The document discusses two potential production locations (Location A and Location B) for a company and compares their fixed and variable costs. Location A has fixed costs of RM870,000 and variable costs of RM50 per unit, while Location B has fixed costs of RM620,000 and variable costs of RM70 per unit. The selling price is RM170 per unit. It asks to determine which location should be chosen for a forecasted production of 20,000 units per year, and the production quantity needed at each location to earn a profit of RM120,000. It also asks at what production quantity the profits would be equal at both locations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    11 views2 pages

    (Test, Apr 2012) : MEM575 / Location: Past Questions

    Uploaded by

    محمد لطفي
    The document discusses two potential production locations (Location A and Location B) for a company and compares their fixed and variable costs. Location A has fixed costs of RM870,000 and variable costs of RM50 per unit, while Location B has fixed costs of RM620,000 and variable costs of RM70 per unit. The selling price is RM170 per unit. It asks to determine which location should be chosen for a forecasted production of 20,000 units per year, and the production quantity needed at each location to earn a profit of RM120,000. It also asks at what production quantity the profits would be equal at both locations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 2

    MEM575 / Location: Past questions.

    (Test, Apr 2012)


    2c. The costs involved for two prospective production locations (Location A and Location B) are given in the following table: Location A B Fixed cost (RM) 870,000 620,000 Variable cost (RM) 50 70

    The selling price of the product is expected to be RM170 each. i. If the forecasted production is 20,000 units per year, which location should be chosen and why? ii. How many units each will Location A and Location B have to produce to gain a profit of RM120,000? (i and ii 3 marks each) iii. At what quantity of production would the profit be equal irrespective of whether the company operates from Location A or Location B. (4 marks)

    (Exam, June 2012)


    Selecting a facility location is becoming much more complex with the globalization of the workplace. Besides globalization, a number of other factors also affect the location decision. Identify and describe briefly any two (2) of these factors. (5 marks)

    (Exam, Jan 2012)


    a) A company has the intention to establish a production plant manufacturing rubber based products. The current market outlets and the respective sale volume are listed in Figure Q1(c) and Table Q1(c). Find a suitable location of the factory so that the cost of delivery will be at minimum. If the centre of location is not ideal, explain the reasons for the limitation of the assessment method. Suggest a better alternative and justify your decision. (6 marks)

    Figure Q1(c) : Location of market outlets

    Table Q1(c) : Sale volume in four market outlets Market Pulau Pinang Kuala Lumpur Kuantan K. Trengganu Sales volume 300 600 200 200

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