Case 3 (1 Mark) Consider the following series of independent situations in which a firm is about to make a strategic decision. a. Stila Cosmetics is considering introducing an anti-aging facial cream with natural ingredients. b. Kontron Computers is deliberating to produce a special type of microprocessor with an advanced technology which will bring down the cost of production. c. Pelican Industries wants to install biometric system in its factory to reduce idle labor time and increase productivity. d. Coral Health Solutions decides to introduce a unique telemedicine facility for its remote patients. For each decision, state whether the company is following a cost leadership or a product differentiation strategy. Case 4(.25 Mark ) Identify the most accurate statements from the following about the undertaking of customerprofitability analysis. A) The best measure of customer profitability is customer revenue less the activity-based manufacturing cost of the products purchased. B) Using activity-based costing to allocate marketing and sales administration costs to customers will provide a useful measure of customer profitability. C) Despite activity-based costing being used, the allocation of customer-related costs to each individual customer as the final cost object is still problematic. D) Customer-profitability analysis based on gross margins provides the basis for the development and implementation of strategies tailored to improving the profitability of individual customers. Case 5 (.25 Mark) In which of the following manufacturing organisations would activity-based costing be most relevant? A High product diversity and little automation. B High product diversity and high automation. C Low product diversity and little automation. D Low product diversity and high automation. Case 6(.25 Mark ) What would be the effect of dropping an unprofitable customer? A) eliminate long-run costs assigned to that customer B) eliminate most short-run costs assigned to that customer C) decrease long-run profitability D) increase the potential to cross-sell other products that are more desirable