The manager of a car wash must decide whether to have one or two wash lines
The manager of a car wash must decide whether to have one or two wash lines. One line will mean a fixed cost of $6,000 a month, and two lines will mean a fixed cost of $10,500 a month. Each line would be able to process. 15 cars an hour. Variable costs will be $3 per car, and revenue will be $5.95 per car. The manager projects an average, demand of between 14 and 18 cars an hour. Would you recommend one or two lines. The car wash is open 300 hours a month.
Homework Answers
It is good to go with two washlines.even if 2 lines can process 30 cars, maximum demand is still 18, therefore maximum extra profit is at best 18*300*2.95-15*300*2.95= 2655$, whereas, extra cost of 2nd line is 4500$. best to have 1 car wash
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The manager of a car wash must decide whether to have one or two wash lines
#2 The manager of a car wash must decide whether to have one or two wash...
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