Qualitative and quantitative justification, Operation Management

1.  Maggie Company produces a light fixture with the following unit costs:
 
Direct Materials: $2
Direct Labour: $2
Variable Cost: $3
Fixed Cost: $2
UNIT TOTAL COST: $9
 
The production capacity is 300,000 units per year. Because of a depressed housing market, the company only expects to produce 180,000 fixtures for the coming year. The company also has fixed selling costs totalling $500,000 per year and variable selling costs of $1 per unit sold. The fixtures normally sell for $12 each.

At the beginning of the year, a customer from a geographic region outside of the areas normally served by the company offered to buy 100,000 fixtures for $7 each. The customer also offered to pay all transportation expenses. Since there would be on sales commission involved, this order would not have any variable selling expenses.

Should the company accept the order? Provide both qualitative and quantitative justification for your decision. Assume that no other orders are expected beyond the regular business and the special order.

Posted Date: 2/25/2013 2:35:17 AM | Location : United States







Related Discussions:- Qualitative and quantitative justification, Assignment Help, Ask Question on Qualitative and quantitative justification, Get Answer, Expert's Help, Qualitative and quantitative justification Discussions

Write discussion on Qualitative and quantitative justification
Your posts are moderated
Related Questions
Product Layout - Disconnected Flow any products or components (eg toys, shoes, many electronic components) are required in volumes which do not justify continuous operation,

I need help with writing an rcode to analyze an experiment for a two way layout without replication. There are two factors each with 3 levels.

Why is it important for marketers to fully understand today's consumer behavior? Explain the factors that influence consumer's buying behavior.

Demand curve to estimate the consumer surplus: Adam's demand curve for commodity X is: XA = 10 - 2Px . Betty's demand curve for commodity X is: XB = 10 - 3Px . (a) What is

A wide array of leadership perspectives and theories. In order to synthesize the information, it is best to look at a real-life situation and analyze the leadership styles. Case 14

Emotional intelligence; a key factor to success I want a 20 question survey for this topic, based on these 5 factors self-awareness, self-regulation, motivation, empathy, and socia

What behavioural predictions might you make if you know that an employee had an external locus of control? If an employee had a high need for achievement? If an employee had a low


Explain how you woul eliminate waste through flexible processes

In a rectangular game, pay-off matrix of player A is as follows: Player B B1 B2 Player A A1 A2 i) Solve the game. ii) Write down the pay-off matrix of B and then, solve the g