=+9-20 KK Customer profitability in a manufacturing company OBJECTIVE 8 Cartwright Ltd makes a component they call 9-CW9-14. This component is manufactured only when ordered by a customer, so Cartwright Ltd keeps no inventory of 9-CW9-14. The list price is $100 per unit, but customers who place ‘large’ orders receive a 10% discount on price. Currently, the salespeople decide whether an order is large enough to qualify for the discount. When the product is finished, it is packed in cases of 10. When a customer order is not a multiple of 10, Cartwright Ltd uses a full case to pack the partial amount left over (e.g. if customer C orders 25 units, three cases will be required). Customers pick up the order so Cartwright Ltd incurs costs of holding the product in the warehouse until customer pick-up. The customers are manufacturing firms;

if the component needs to be exchanged or repaired, customers can come back within 10 days for free exchange or repair.