Answered step by step
Verified Expert Solution
Question
1 Approved Answer
FruitsForLife (Pty) Ltd produces two products (namely, guava jam and guava fruit rolls) and then resells them to local markets and retailers. Most of the
FruitsForLife (Pty) Ltd produces two products (namely, guava jam and guava fruit rolls) and then resells them to local markets and retailers. Most of the products are sold to supermarkets that sell these products to the general public. The annual demand for both jam and fruit rolls is limited to 30000kg of each. The supply of fresh guavas by the supplier, Fresh-Foods Ltd, is limited to 18000kg per annum owing to competition from other large food-processing entities. Both products require preservative powder, which is limited to a supply of 1000kg per annum. There is an expected increase in competition from large food-processing entities for the supply of guavas and the emergence of substitute products for the jam in the foreseeable future. The marketing team has pointed out that there is a growing demand for FruitForLife (Pty) Ltd's products in other parts of the continent. There are several small-medium suppliers of guavas in the Mpumalanga and Limpopo province. The selling price and standard cost for 1kg of each of the products is as follows: Scarce ingredients included in the recipes are as follows: REQUIRED: 2.1. Discuss four possible qualitative factors that FruitsForLife (Pty) Ltd should consider in maximising profit. (4 marks) 2.2. Advise FruitsForLife (Pty) Ltd with regard to the production strategy that will maximise their profit. (12 marks) Round to two decimals where applicable. FruitsForLife (Pty) Ltd produces two products (namely, guava jam and guava fruit rolls) and then resells them to local markets and retailers. Most of the products are sold to supermarkets that sell these products to the general public. The annual demand for both jam and fruit rolls is limited to 30000kg of each. The supply of fresh guavas by the supplier, Fresh-Foods Ltd, is limited to 18000kg per annum owing to competition from other large food-processing entities. Both products require preservative powder, which is limited to a supply of 1000kg per annum. There is an expected increase in competition from large food-processing entities for the supply of guavas and the emergence of substitute products for the jam in the foreseeable future. The marketing team has pointed out that there is a growing demand for FruitForLife (Pty) Ltd's products in other parts of the continent. There are several small-medium suppliers of guavas in the Mpumalanga and Limpopo province. The selling price and standard cost for 1kg of each of the products is as follows: Scarce ingredients included in the recipes are as follows: REQUIRED: 2.1. Discuss four possible qualitative factors that FruitsForLife (Pty) Ltd should consider in maximising profit. (4 marks) 2.2. Advise FruitsForLife (Pty) Ltd with regard to the production strategy that will maximise their profit. (12 marks) Round to two decimals where applicable
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started