Wiebe Trucking, Inc., is planning a new warehouse to serve the western United States. Denver,
Santa Fe, and Salt Lake City are under consideration. For each location, annual fixed costs (rent,
equipment, and insurance) and average variable costs per shipment (labor, transportation, and
utilities) are listed in the following table. Sales projections range from 550,000 to 600,000
shipments per year.
Annual Fixed Costs Variable Costs per Shipment
Salt Lake City
a. Plot the total cost curves for all the locations on a single graph.
b. Which city provides the lowest overall costs?