After successfully launching its new global roaming cell phone, ABC Phone Corp is now in its second year and has determined the following facts relating to the ABC Phone:

The core component is manufactured in a foreign country, peripherals made in Canada and other custom features, are added before shipping to wholesale customers.

The company does not plan to operate retail outlets, and proposes to sell its products on-line only, to end-product retailers

Projected On-Line Sales 100,000 units annually

Development costs to date $2,200,000

Purchase price [plus customization] Can$80.00 per unit

Required rate of return on investments 10%

Cost of operating the web site $200,000 per year

On-Line Marketing $100,000 per year

Other handling costs $2.30 per unit sold

Personnel costs $200,000 per year

Occupancy/Systems costs $500,000 per year

Orders must be in multiples of 100

Required:

1. Determine the minimum quantity, and the price at which the UBI Phone should be sold

1. What do you see as the potential problem/s? How do you suggest the company deal with the problems you see? Give reasons.

1. Using the Balanced Scorecard [BSC], and the Cost of Quality Schedule, and given the problems that North American producers relying on foreign manu- facturers have encountered in the recent past, outline the issues that UBI Phone Corp should expect, and suggest how they should be dealt with

1. If ABC Phone Corp is preparing a budget for the upcoming period, how should it use the above information for planning purposes