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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:
- Use market segmentation analysis to identify the most profitable province.
- 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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