CASE

Description: The Cheap Manufacturing Corporation (CMC) manufactures many low cost electronic products such as MP3 players, cell phones, and digital cameras. CMC is studying the feasibility of a low cost tablet to compete in the highly lucrative tablet market. The market for tablets, is a multi-million dollar business which has been experiencing smaller growth rates in recent years, because tablet owners are not replacing their tablets with new models as frequently as in years past. CMCs marketing team, however, believes there is still potential in the tablet market because many consumers cannot afford the high-end models and are looking for a cheaper option.

APPS ETS The following is the description of the low cost tablet that the marketing department has prepared "The CMC tablet comes engineered with a 1GHz Cortex A8 processor, and a 7-inch capacitive display with four multi-touch points. The screen has a resolution of 800x480 pixels. The CMC tablet sports a front-facing VGA camera, and has built in Wi-Fi connectivity. The new tablet has 512 MB RAM and internal memory of 4GB, which is expandable up to 32GB using a micro SD card. The tablet offers four hours of battery time. The CMC tablet is priced for the cost-conscious consumer looking for a reliable product at an affordable price. 2. Sales and Pricing Projections The project is expected to last 10 years after which CMC will discontinue the low cost tablet. Projected annual sales and prices are given in the table below. Year Price Unit Sales 250,000 270,000 290,000 320,000 300,000 260,000 240,000 230,000 230,000 230,000 $249.99 $249.99 $249.99 $249.99 $199.99 $199.99 $199.99 $199.99 $199.99 $199.99 4 10 Due to the introduction of the new tablet, the company expects a decline in sales of 70,000 units per year of the old tablet model. The old table retails for $160 APPS ETS The following is the description of the low cost tablet that the marketing department has prepared "The CMC tablet comes engineered with a 1GHz Cortex A8 processor, and a 7-inch capacitive display with four multi-touch points. The screen has a resolution of 800x480 pixels. The CMC tablet sports a front-facing VGA camera, and has built in Wi-Fi connectivity. The new tablet has 512 MB RAM and internal memory of 4GB, which is expandable up to 32GB using a micro SD card. The tablet offers four hours of battery time. The CMC tablet is priced for the cost-conscious consumer looking for a reliable product at an affordable price. 2. Sales and Pricing Projections The project is expected to last 10 years after which CMC will discontinue the low cost tablet. Projected annual sales and prices are given in the table below. Year Price Unit Sales 250,000 270,000 290,000 320,000 300,000 260,000 240,000 230,000 230,000 230,000 $249.99 $249.99 $249.99 $249.99 $199.99 $199.99 $199.99 $199.99 $199.99 $199.99 4 10 Due to the introduction of the new tablet, the company expects a decline in sales of 70,000 units per year of the old tablet model. The old table retails for $160