An aluminum can manufacturer has discovered a way to improve its manufacturing process. As a result, its manufacturing cost has been reduced from $0.89 to $0.79 cents. How can the manufacturer best exploit this cost advantage? Information to be given if asked Market • The client is the leader in its market with a 40% share and supplies directly to major beverage manufacturers. • The number two player in the market has about 30% of the market and many small competitors share the rest. Substitutes • Aluminum cans have a lower priced substitute, steel cans, which have inferior printing and stamping characteristics. • Steel cans are used by customers who do not want to pay the premium for aluminum cans.
An aluminum can manufacturer has discovered a way to improve its manufacturing process. As a result, its manufacturing cost has been reduced from $0.89 to $0.79 cents. How can the manufacturer best exploit this cost advantage? Information to be given if asked Market • The client is the leader in its market with a 40% share and supplies directly to major beverage manufacturers. • The number two player in the market has about 30% of the market and many small competitors share the rest. Substitutes • Aluminum cans have a lower priced substitute, steel cans, which have inferior printing and stamping characteristics. • Steel cans are used by customers who do not want to pay the premium for aluminum cans.
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...
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