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Q 1 . Carrefour wants to launch its brand of in - store - grown organic lettuce in small bags. The supermarket has two options
Q Carrefour wants to launch its brand of instoregrown
organic lettuce in small bags. The supermarket has two options
for processing harvested lettuce: manual processing say A and
mechanized processing say B The manual process will incur a
monthly processing cost of $ and a variable cost of $ per
bag, while the mechanized process will incur a monthly
processing cost of $ and a variable cost of $ per bag.
Besides, the mechanized process needs a recyclable bag costing
$ bag to Carrefour. The store expects to fix the price at $
per bag, irrespective of the processes.
a What is the breakeven volume for the manual process?
Also, find the breakeven point in dollars.
b What is the breakeven volume for the mechanized
process? Also, find the breakeven point in dollars.
c Which process will you use if you expect sales of
bags monthly? Also, provide the opportunity loss of profit
if the store does not determine the better method.
d At what sales volume is the profit from the sales made
from the mechanized process more than the profit from the
sales made from the manual process by $
e Find the bags of sales both processes such that the manual
method has bags more than the mechanized method,
and the profit of the mechanized process is $ less than
the manual process.
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