Quantitative Techniques: Theory and Problems

CHOICE OF ALTERNATIVES PROBLEMS

Problem 1.60

The X Ltd. manufactures a product which costs:

Variable per unit 10 paise, sales are at present 10,000 units per month at 30 paise per unit.

1. A proposal to extend the sale to a foreign market has come where demand for an additional 5,000 units per month is expected. However, in order to do this, it will be necessary to absorb additional shipping cost an duties amounting to 12 paise per unit. Will the foreign business be profitable?
2. A domestic chain store has offered to take 5,000 units per month at 18 paise per unit. Should this order be accepted in place of the foreign order?
3. The sales department proposes to reduce the selling price of the product to increase sales. The following estimates of sales ...