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Preview division divides M proportional to preview demand, i.e., each SKU n 2N gets fraction
This method is included because it is used by the case company, in combination with Method 2. Preview division was previously pro posed by Chambers and Eglese (1988). However, they restrict the method to grouping SKUs per ‘product line', while here it can be applied for any chosen way of grouping.
Question: (a) Discuss the concept of financial gearing and its implications for share price maximisation. (b) A firm has both, a current and a target debt-equity ratio of 0.
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