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
1) Definition of Quality Part 1: How do you define Quality? Provide a definition of quality, support your definition, and define the stakeholders who are affected by your quality d

Identify the four individual level barriers to communication and the ways to overcome them

Question: S&V Industries manufactures book cases. Different sizes of cases are kept in inventory. The company has 80 man-hours and 36 pounds of wood available each day. 2 pounds of

Customer Satisfaction and Service Quality - Operation Strategy Although you have seen examples of the dimensions along which companies compete and approaches to operations st

The overall average on a process you are attempting to monitor is 50 units. the process standard deviation is 1.72. Determine the upper and lower control limits for a mean chart, i

Question : (a) "When a team is performing at its best, you'll usually find that each team member has clear responsibilities. You'll also see that every role needed to achieve t

1. A state department of tourism and recreation collects data on the number of cars with out-of-state license plates in a state park. (The group's position is that more out-of-stat

Does anyone know how to do aon in Excel 2010 and if so can they contact me and wlk me through it sso that I can understand it

Why is it deemed necessary to protect the environment? What does it mean to society? To business? To the individual? To future populations?

Discuss the value of marketing to the consumer, the stakeholder and stockholder. Address the following: a. the value you place on marketing b. the value of marketing to customers a