Marisa Strauss, a financial analysis for Green Garden Salads, Inc., is currently evaluating three different sites for locating its plant in the greater San Francisco area. This plant will produce prepackaged tossed salads in five-and ten-pound bags. The three locations are (a) Oakland, (b) Petaluma, and (c) San Jose. Marisa estimates that the fixed costs and the variable unit costs associated with each site are as follows:

Marisa Strauss, a financial analysis for Green Garden Salads, Inc., is currently evaluating three different sites for locating its plant in the greater San Francisco area. This plant will produce prepackaged tossed salads in five-and ten-pound bags. The three locations are (a) Oakland, (b) Petaluma, and (c) San Jose. Marisa estimates that the fixed costs and the variable unit costs associated with each site are as follows:

A. Plot the total costs curves for each of these locations on a single graph and identify the range of outputs for which each alternative site is the most economical.

B. If the vice president of marketing has estimated the demand for prepackaged salads to be 500,000 lb. per year, which location would you pick and why?

Location Fixed Costs per Year Variable Costs per Unit

Oakland $250,000 $10/100lb

Petaluma $100,000 $30/100lb

San Jose $150,000 $20/100lb

Question 4

You are the newly appointed assistant administrator at a local hospital, and your first project is to investigate the quality of the patient meals put out by the food-service department. You conducted a 10-day survey by submitting a simple questionnaire to the 400 patients with each meal, asking that they simply check off either that the meal was satisfactory or unsatisfactory. For simplicity in this problem, assume that the response was 1,000 returned questionnaires from the 1,200 meals each day. The results ran as follows:

Date in December

# of Unsatisfactory Meals

Sample Size

1

74

1,000

2

42

1,000

3

64

1,000

4

80

1,000

5

40

1,000

6

50

1,000

7

65

1,000

8

70

1,000

9

40

1,000

10

75

1,000

600

10,000

A. Construct a p-chart based on the questionnaire results, using a confidence interval of 95.4 percent, which is two standard deviations.

B. What comments can you make about the results of the survey?