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The government of Zambia has decreed that maize is strategic commodity and that it must be available in all parts of the country. The Food

The government of Zambia has decreed that maize is strategic commodity and that it must be available in all parts of the country. The Food Reserve Agency (FRA), as a state-owned company, has been mandated to buy maize from farmers and distribute the maize to its depots located in all the provincial centres of Zambia. During the last season, the sales in Kwacha to each depot and related marketing costs are shown in Table

Depot Sales Delivery expenses Wages Storage costs Promotion expenses
Central 10000 - 5000 - 500
Lusaka 7500 300 3750 1000 700
Southern 4000 1000 2000 500 200
C/Belt 6000 200 3000 800 300
N/western 2000 300 1000 200 200
Western 1000 500 500 100 100
Eastern 9000 800 4500 300 400
Northern 4000 600 2000 200 100
Muchinga 3000 700 1500 300 100
Luapula 4000 600 2000 200 100

Required:

  1. Use market segmentation analysis to identify the most profitable province.
  1. Given the relative level of profit, identify the province which has the highest proportion of marketing costs to sales.

(Justify your answers by showing pertinent computations)

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