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c. if it costs $8 million per million tons of lost business and $80 million to build a million tons of capacity, how much capacity should be built to minimize total costs?

Respuesta :

Build 10 million tons of capacity at a minimum total cost of 832.8 million dollars.

Cx = (X units × unit cost) + cost of lost sales per unit [(no. of units ×probability) + …. + (no. of units × probability)]

For Building 10 million tons:

C10 = (10 × $80) + $8[(0 × 0.10) + (2× 0.25) + (4 ×0.30) + (6 × 0.20) + (8 × 0.15)]

= $832.8

Build 10 million tons of capacity at a minimum total cost of 832.8 million dollars.

Ton is the name of a number of different measurement units. It has a lengthy history and a variety of meanings and applications.

It mostly discusses weight units. Due to the ambiguous nature of what ton might mean

2,240 pounds, or the long ton

2,000 pounds is a short ton.

the tonne, or metric ton, which weighs one thousand kilograms.

Its original use as a volume measurement has persisted in terminology like the freight ton and several other units, with capacities ranging from 35 to 100 cubic feet (0.99 to 2.83 m3). The ton has recently been used for specialized purposes such as energy measurement and vehicle classification.

To learn more about Tons visit here:

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