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
Case Study: The ePoint Store stocks paint in its warehouse and sells it online on its Internet Web site. The store stocks several brands of paint; however, its biggest seller i

Freight car loadings over a 12-year period at a busy port are as follows: Week Number Week Number Week Number 1 220 7 350 13 488 2 245 8 360 14 475 3 274 9 440 15 499 4 275 10 380

For this week's discussion you are to post responses to the following questions: 1. how is planning changing in the new workplace? 2. Do you think planning becomes more important o

A firm wishes to determine the efficiency and utilization of a work center coposed of 3 machines each working 16 hours per day for 5 days a week. A study undertaken by the material

The restaurant would serve dinner Tuesday through Saturday. Brian has noticed a restaurant for lease. The restaurant has seven tables, each of which can seat four. Tables can be mo

The quesstion is to develop a scattr diagram using total number of shiments and number of defective shiments. This is for Project management mgmt. can some one help me with this

Please explain how you would handle the following question: An environmental impact statement confirms that you are within your legal rights to build a hotel property in a scenic a

would you recommend changing to the optimal order interval?

What are the major considerations regarding logistics alliances, for: a) initiation? b) implementation? c) maintenance? d) termination?

4.31 Coffee Palace's manager, Joe Felan, suspects that demand for mocha latte coffees depends on the price being charged. Based on historical observations, Joe has gathered the fol