Short-term decision-making problem, Other Management

Assignment Help:

A company manufactures and sells a single product. The variable cost of the product is Rs 2.50 per unit and all production each month is sold at a price of Rs 3.70 per unit. A potential new customer has offered to buy 6,000 units per month at a price of Rs 2.95 per unit. The company has sufficient spare capacity to produce this quantity. If the new offer is accepted, sales to existing customers are expected to fall by two units for every 15 units sold to the new customer.

Required:

(a) Should the new offer be accepted and if accepted what would be the overall increase in monthly profit.

(b) In the short-term decision-making context, which ONE of the following would be a relevant cost?

- Specific development costs already incurred.
- The cost of special material which will be purchased.
- The original cost of raw materials currently in inventory which will be used on the project.

(c) Briefly illustrate what you understand by the term "sunk cost".


Related Discussions:- Short-term decision-making problem

Community of practice, Community of Practice Communities of Practice (C...

Community of Practice Communities of Practice (CoP) are a network of people who are engaged in the process of collective learning in a shared domain. In the organisational cont

Purpose of management of quality, P urpose of management of quality Le...

P urpose of management of quality Let us first discuss the importance of quality. Quality is  important  as  it  helps organisations achieve  their  internal and external g

Porter''s five forces model, QUESTION 1 Implementation of selected stra...

QUESTION 1 Implementation of selected strategies is a phase in the strategic management process. Discuss the key issues that need to be considered in this phase. QUESTION 2

Explain the pat jackson''s process, Question 1 Strong employee relatio...

Question 1 Strong employee relations equals solid organizations. Companies that interact effectively with workers financially outperform those that don't. Illustrate five m

Organizational Behaviour, If you were one of the other foreman, what could ...

If you were one of the other foreman, what could you do to make Rajinder''s transition easier.

Reference work - library management, REFERENCE WORK: The purpose of re...

REFERENCE WORK: The purpose of reference work is to allow information to flow efficiently from information sources to those who are looking for it. In the day to day activitie

Public documentation/information centres, Public documentation/information ...

Public documentation/information centres: Established from public funds, these may not be self- supporting financially. In developing countries, documentation and information

Instructional leadership, 1. What instructional technology and techniques i...

1. What instructional technology and techniques increase student achievement? 2. Does single-gender education increase student achievement? 3. Does class size impact student achiev

Discuss the characteristics of each of types of change, Question 1: "Jo...

Question 1: "John Kotter (1996), developed an eight-step model of organisational change, designed to help transform organizations and then anchor the new behaviours, systems, a

Do''s and don''ts while conducting a negotiation, Some detailed important d...

Some detailed important do's and don'ts while conducting negotiations are given hereunder.  Do's:  Know your authority as a negotiator and that of your counterpart.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd