Evaluate 7.2 Problem 3

Two alternative locations are under consideration for a new plant: Jackson, Mississippi and Dayton, Ohio. The Jackson location is superior in terms of costs. However, management believes that sales volume would decline if this location were chosen because it is farther from the market, and the firm’s customers prefer local supplies. The selling price of the product is $250 per unit in either case. Use the information in the table attached to determine which location yields the higher total profit per year.