Decision making

Part A

1. Discuss the general rule for accepting a special order. List two qualitative factors that often needto be considered when deciding whether to accept a special order.

2. Explain how managers decide which products in a sales mix to emphasise.

3. Describe several methods that can be used to relax constrained resources.

Part B

Required

1. Should Award Plus accept this special order? Show your calculations.

2. Suppose plant capacity were only 9,000 medals instead of 10,000 medals each month. The specialorder must either be taken in full or be rejected completely. Should Award Plus accept the specialorder? Show your calculations.

3. As in requirement 1, assume that monthly capacity is 10,000 medals. Award Plus is concernedthat, if it accepts the special order, its existing customers will immediately demand a price discountof $10 in the month in which the special order is being filled. Should Award Plus accept the specialorder? Show your calculations.

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