All Things Tennis

docx

School

Meru University College of Science and Technology (MUCST) *

*We aren’t endorsed by this school

Course

MANAGERIAL

Subject

Economics

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by kipketervictor40

1 All Things Tennis Student Name: Institutional Affiliations: Date of Submission:

2 ATT's Weekly Fixed Cost of Producing the Animal Racket ATT's weekly fixed cost can be calculated by subtracting the variable cost per unit (1.10 €) from the average per unit cost (3.50 €): 3.50 € - 1.10 € = 2.40 € Therefore, ATT's weekly fixed cost for producing the animal racket covers is 2.40 €. Should ATT accept Toronto’s offer? Based on the given data, it does not appear financially beneficial for ATT to accept Toronto's offer (Lambe & Spekman, 2019). The offer of 2 € per racket cover is significantly lower than the current selling price of 4.25 €, which would result in a lower profit margin for ATT. Additionally, accepting Toronto's offer would not fully cover the cost of 1.10 € per unit, resulting in a loss for the company. Furthermore, while ATT does have enough capacity to produce the additional 100 racket covers, the estimated cost of producing all 600 racket covers would still be 3.10 € per unit. This means that even with the different orders from Toronto, ATT's average per unit cost would only decrease by 0.40 €, which may not be enough to cover the fixed costs and maintain a profit. As a result, accepting Toronto's offer would likely decrease firm value for ATT (Lambe & Spekman, 2019). The company would be better off focusing on selling its products to European distributors, where they can maintain a higher profit margin and cover their fixed costs. Factors That ATT Should Consider Before Making A Decision To Accept Toronto's Offer There are several other factors that ATT should consider before deciding to accept Toronto's offer. These include market demand, production capacity, transportation and distribution costs, and potential risks (Siegenthaler & Lam, 2019). Firstly, market demand is an

3 important factor to consider. ATT must evaluate the potential sales and demand for animal racket covers in the Canadian market. If the demand for these products is low, it may not be worth it for ATT to accept Toronto's offer, as it could result in a surplus of unsold inventory and potential losses. Secondly, ATT must also assess their production capacity and whether it can meet the additional demand from Toronto while still fulfilling orders from their European distributors. They must also factor in the potential impact on lead times and the ability to meet production deadlines, potentially affecting their relationships with existing distributors. Transportation and distribution costs are also important considerations (Siegenthaler & Lam, 2019). Shipping the products to Toronto from Europe could be costly, and ATT must evaluate whether the proposed price of 2 € per racket cover would cover these additional costs. They may also need to consider potential tariffs and customs duties that could affect the final cost of the products. Lastly, ATT must also assess the potential risks of accepting Toronto's offer. This could include the risk of non-payment from Toronto Sports and possible damage or loss of products during transportation (Siegenthaler & Lam, 2019). They must also consider the potential impact on their brand and reputation if the products sent to Toronto are of lower quality or if delivery delays. In conclusion, while the data provided in the problem suggests that accepting Toronto's offer may not be financially advantageous for ATT, several other important factors must be considered before making a decision (Siegenthaler & Lam, 2019). Careful analysis of market demand, production capacity, transportation and distribution costs, and potential risks is necessary to make an informed decision to maximize firm value for ATT.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

4 References Lambe, C. J., & Spekman, R. E. (2019). Alliances, external technology acquisition, and discontinuous technological change. Journal of Product Innovation Management: AN International Publication of the Product Development & Management Association , 14 (2), 102-116. Siegenthaler, K. L., & Lam, T. C. M. (2019). Commitment and ego‐involvement in recreational tennis. Leisure Sciences , 14 (4), 303-315.

Related Documents

Housing crisis on people living with a disability or impairment..docx

Screenshot 2023-12-13 at 7.37.54 PM.png

MODULO 6.1.pdf

W11 Reflection-DT.docx

MTH6.docx

Auto Insurance - Assignment 10 (1).docx

Which of the following would NOT be a valid value for standard deviatio1.docx

tipswordlandon_969681_53706360_HW 10.pdf

Business Reasearch.docx

Capitalist assignmet.docx

Fair Interest Rate Calculation.docx

6.docx

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach

Economics

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Cengage Learning

Managerial Economics: Applications, Strategies an...

Economics

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:Cengage Learning

Microeconomic Theory

Economics

ISBN:9781337517942

Author:NICHOLSON

Publisher:Cengage

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Survey Of Economics

Economics

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Cengage,

Economics For Today

Economics

ISBN:9781337613040

Author:Tucker

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning