Question
Question 4: )(B1, C3) Zain must decide how best to use a monthly factory capacity of 1,500 units. Demand from regular customers is risky and
Question 4: )(B1, C3)
Zain must decide how best to use a monthly factory capacity of 1,500 units. Demand from regular customers is risky and could be either 500, 600 or 700 units per month. Regular customers generate contribution of $6 per unit. Zain has the opportunity to enter a special contract which will generate contribution of only $4 per unit. For the special contract, she must enter a binding agreement now at a level of 1000, 800 or 600 units.
Instructions:
Display all possible contributions in the table below. Show your calculation.
Special contract | |||
Demand units | 1000 | 800 | 600 |
500 |
|
|
|
600 |
|
|
|
700 |
|
|
|
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