Quality product, Strategic Management

An electronics firm is presently manufacturing an item that has a variable cost of $0.50 per unit and a selling price of $1.00 per unit.  Fixed costs are$14,000 per month.  present volume is 30,000 units per month.  The firm wants to better the product quality by adding a new piece of equipment at an additional fixed cost of $6,000 a month.  Variable cost would enhance to $0.60 a unit but volume should jump to 50,000 units a month due to improved productivity.  Though the new product is of a higher quality, the firm intends to stay with the selling price of $1.00 per unit (for competitive purposes).

(a)    Should the firm buy the latest equipment?

(b)    The firm is now considering stepping the new volume to 45,000 units a month to make even better quality products and enhance the selling price to $1.10 a unit.  Under these circumstances, should the company buy the latest equipment and enhance the selling price?

Posted Date: 3/25/2013 4:14:07 AM | Location : United States







Related Discussions:- Quality product, Assignment Help, Ask Question on Quality product, Get Answer, Expert's Help, Quality product Discussions

Write discussion on Quality product
Your posts are moderated
Related Questions
Whether, a strategy addresses the circumstances in which an company is operating

Explain what is meant by 'non-market housing' and by what means it is delivered in either the UK or a country of your choice. What problems arise in its delivery? Outl


1. Identify and discuss strategic capabilities (resources and competences) of the chosen company using appropriate strategy tools and identify strengths and weaknesses for the firm


QUESTION 1 Individuals at all levels are prone to resisting change. What are the five main reasons why individuals resist change? QUESTION 2 Research has identified six

how to write an assignment on market segmentaion

What Is Strategy & Why Strategy Is Important? Managers at all companies facade three innermost questions in view strategically concerning their companies' current circumstances

Question: (a) Briefly discuss the following Maintenance practices and list some of the techniques used to implement these practices in the work environment (i) Predictive

Undertake the following tasks : 1. Develop a position paper for enhancing the organisation's strategic capability by influencing the strategy in action. 2. Evaluate the organ