Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 9

The fixed costs required to modify an existing production facility's layout is estimated to be $15,000,000. It is believed that the new layout will reduce the variable cost per unit associated with producing the product by $1.25 (from the current $10 per unit to $8.75). If the product sells for $40 per unit, what must demand be for the modification to break even?