A company is deciding where to assign its summer intern. The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue) by $25,000
If sales (revenue) is divided into the three categories shown in the table, where should the manager assign the intern to maximize profits?
Supply Chain Costs Production Costs Profits
% of current sales (revenue) 35 25 40
The intern would save $10,000 in the supply chain, or show a profit of $10k. Profit from the increase in sales would be equal to revenue - costs. If revenue is X, then costs would be (.35+.25 )X. Thus profit would be X - .6X or simply .4X. $25,000(.4 ) = $10,000 so the manager is neutral on where to assign the intern.
You might also like to view...
A DSS is defined as a set of procedures and sources used by managers to obtain everyday information about pertinent developments in the environment
Indicate whether the statement is true or false
Which of the following is NOT multi-channel marketing?
A. A mix of direct and indirect channels B. A brick-and-click model of distribution C. A hybrid, or dual/concurrent channel D. A channel that minimizes inter-brand competition E. All of the above are multi-channel marketing