Homework Help is Here – Start Your Trial Now!
Business
Operations Management
(a) Is it justified to reject the order? (b) Briefly explain four qualitative factors that are relevant when evaluating such type of decision.

(a) Is it justified to reject the order? (b) Briefly explain four qualitative factors that are relevant when evaluating such type of decision.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

 Kimberly Ltd manufactures and markets a Fizzy drink, which is sold for Rs 25 per can. Current output is 30,000 cans per month, which represent 60%of capacity. The company has the opportunity to utilize their surplus capacity by selling their product at Rs 16 per can to a supermarket chain. Total costs for the last month were Rs 550,000 , of which Rs 130,000 were fixed costs. The immediate reaction from the manager was to reject the order because total unit cost exceeds the special price. Required: (a) Is it justified to reject the order? (b) Briefly explain four qualitative factors that are relevant when evaluating such type of decision. 

Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS