10 Oct 2020
a. A company has to decide among three processes that makes the same product but with different capacities, to implement next fall. The information on the processes are:
Process 1-Fixed Cost $20,000, Variable Cost $12
Process 2-Fixed Cost $15,000, Variable Cost $16
Process 3-Fixed Cost $12,000, Variable Cost $20
The company estimated the demand to be between 700 and 1200 products. Using a graph, explain which process should the company select.