Question

Nike wishes to produce a very limited particular line of retro basketball shoes called Nike Cortez. Below are the three production facility options. Round to two places beyond the decimal and assume US Dollars. Nike wants to sell 1,500 pairs this run (Z=1500). Selling Price is $200/pair. All answers must be in appropriate units, and rounded to two points beyond the decimal.
City FC + VC/unit
Singapore 40605 74x
Ciudad Juarez 65842 53x
Bangkok 115963 22x
1. Calculate the Location Crossover algebraically for Singapore - Ciudad Juarez
2. Calculate the Location Crossovers algebraically for Ciudad Juarez – Bangkok
3. Draw the Location Crossovers below graphically, indicating FC and slopes for VC for all three production locations and x1 and x2. Label!! [8] Note that a negative sloping curve is nonsensical!
4. What is our profit?

Answer 1

Answer:

The solution to the given points can be defined as follows:

Explanation:

In point 1:

$\text{Algebraically, Singapore Convergence position - Ciudad Juarez} = \frac{\text{(Ciudad FC - Singapore FC)}}{\text{(VC of Singapore - VC of Ciudad)}}$                                                                                                    $= \frac{(65842-40605)}{(74-53)}\\\\= \frac{(25237)}{(21)}\\\\= 1201.7619\\\\=1202$

In point 2:

$\text{Place Cross-over Ciudad Juarez matrix multiplication - Bangkok} = \frac{\text{(Ciudad FC Bangkok FC)}}{\text{(VC of Ciudad - VC of Bangkok)}}$                                                                                                       $= \frac{(115963-65842)}{(53-22)}\\\\= \frac{(50121)}{(31)}\\\\= 1616.80\\\\= 1617$

In point 3:

Please find the attached file.

In point 4:

$\to Profit= 2000 \times (112-22) -115963$

               $= 2000 \times (90) -115963\\\\= 180000-115963\\\\=64037$