yo. 0)
for two MACHINES OPHON,
500 wits
wp) 10 0)
c wnt tor three machines OPLON
eax everrpalnt forth
xo, 21000 « 700 units
x
c . amand & benveen 600 to 650 units,
acted demand DST pine option (ie. 400 unis) Is not fease because it exceeds the range of
rv sngle machine C :
» produce’ 0 to 300)
on ced with ene machine (1.8
pene na con be ON chines is 700 units which s more than she UPEST limit of projected emencot
even pont for 3 eye. For 2 machines option the break even Volume is 500 units and vol
ered hence NO
0 :
: nd of 600 can be met with 2 machines and profit is earned because the production aaa of
vemane Srak even volume of 500. If the manager wants 10 produce 650 units with 3 machines, there
becouse the break even volume with three machines is 700 units. Hence, the manager would choose
and produce 600 units.
on my be understood as the function of determining where the plant should be located for maximum
ea en ond effectiveness. The selection of a place for locating a plant is one. of the problems,
mmportant, which is faced by an entrepreneur while launching a new enterprise. A selection on
erations will ensure an easy and regular supply of raw materials, labour force, efficient plant
oo feaston of production capacity and reduced cost of production. An ideal location may not, by
soc uecers but it certainly contributes to the smooth and efficient working of an organisation. A
on the other hand, is a severe handicap for any enterprise and it finall bankrupts it, It is, therefore,
nat uimost care should be exercised in the initial stages to select a
“ng 0 plant it becomes extremely difficult and costly to correct it,
in Location Selection
*yslematic in choosing a plant location, the entrepreneur would do well
” the country or outside;
” of the region;
ect
or ot
_ Ne locality or community;
Sn of the exact site,
STITUTI
EOF Cost ACCOUNTANTS OF INDIA
ee