Table 2-4 Static Analysis of C & B Chemical Company (50,000 pounds of output)

Techniques of Logistics System Analysis: Long-Run/Dynamic Analysis This technique is illustrated in Figure 2-11. Comprised a graph of the fixed and variable costs of at least two alternative logistics systems. The graph may have at least one indifference point, but may have multiple points of indifference. Examine the data presented in Figure 2-11.

Figure 2-11 Dynamic Analysis

Dynamic Analysis System 1 Total Cost = Fixed Costs + Variable Cost/unit x number of units y = $4200 + 0.0315x System 2 y = $4800 + 0.0230x Trade-off Point System 1 Total Costs = System 2 Total Costs $4200 + 0.0315x = $4800 + 0.0230x 0.0085x = $600 x = 70,588 pounds