In the light of the solution to the problem stated in Chapter 25, the company wants to consider where it might be most worthwhile to expand repair capacity.[27] The weekly fixed costs, given below, include interest payments on the necessary loans for expansion.
The options are as follows:
Expand repair capacity at Birmingham by 5 cars per day at a fixed cost per week of £18,000.
Further expand repair capacity at Birmingham by 5 cars per day at a fixed cost per week of £8000.
Expand repair capacity at Manchester by 5 cars per day at a fixed cost per week of £20,000.
Further expand repair capacity at Manchester by 5 cars per day at a fixed cost per week of £5000.
Create repair capacity at Plymouth of 5 cars per day at a fixed cost per week of £19,000.
If any of these options is chosen, it must be carried out in its entirety, that is, there can be no partial expansion. Also, a further expansion at a depot can be carried out only if the first expansion is also carried out, so for example option (2) at Birmingham cannot be chosen unless option (1) is also chosen. If option (2) is chosen, thereby also choosing option (1), these count as two options. Similar stipulations apply regarding the expansions at Manchester. At most three of the options can be carried out.