Sell it or Sink it
What is Marketing Mix
A bakery makes 500 identical cupcakes, then stops production to make 500 muffins.This would be the best production Method.
What is Batch Production?
A factory orders components only when they are needed, reducing storage costs but increasing the risk of production stopping if suppliers are late.
What is Just-in-Time (JIT)?
A factory produces 2,000 units. Rent is $12,000 and variable cost is $5 per unit. This is its total cost.
What is $22,000?
Selling price is $20, variable cost is $12 and fixed costs are $32,000. This is the break-even output.
What is 4,000 units?
A company enters a foreign market using the exact same advertising campaign it uses at home, but customers find the advert offensive. What marketing issue has the company failed to consider?
What is Cultural/social differences?
This production method would be unsuitable for handmade luxury furniture made to individual customer requirements. As it requires a set design and a set task in a production line.
What is flow production?
Workers regularly suggest small improvements to reduce waste and improve productivity.
What is Kaizen?
Output doubles from 1,000 to 2,000 units while rent remains $10,000. Fixed cost per unit falls to this amount.
What is $5 per unit?
Break-even output is 5,000 units and actual sales are 7,200 units. This is the margin of safety.
What is 2,200 units?
A business wants to enter Thailand but has little knowledge of local laws, customer tastes or distribution. Explain one advantage of using a joint venture. They use this method instead
A manufacturer switches from batch to flow production and benefits from higher output, automation and lower unit costs.
What is an advantage of flow production / lower average cost?
A factory increases output from 7,200 to 8,400 units using the same 24 workers. Labour productivity rises by this many units per worker.
What is 50 units per worker?
Fixed costs are $30,000, variable cost is $6 per unit and output is 7,500 units. This is total cost.
What is $75,000?
Fixed costs rise to $30,000. Selling price is $10 and variable cost is $4. This becomes the new break-even output.
What is 5,000 units?
A fast-food company enters a country where average incomes are much lower than in its home market. They will need to reconsider this element of the marketing Mix.
What is Price?
A company makes standardized school uniforms in large quantities, but demand changes significantly by season. This production method is likely to be most suitable.
What is batch production?
Faster output, greater consistency and lower labour costs are possible advantages of introducing this into production.
What is automation?
A large company can borrow money at a lower interest rate than a smaller competitor.
What is a financial economy of scale?
A product sells for $18 with variable cost of $10 and fixed costs of $48,000. The selling price falls to $16. Break-even output increases by this amount.
What is 2,000 units?
A company can enter a foreign market either by opening its own stores or This particular method.
What is Franchising?
A soft drink manufacturer wants to produce millions of identical bottles continuously with very little interruption between each unit.
What is flow production?
A JIT manufacturer may decide to hold this after repeated supplier delays, even though storage costs will increase.
What is buffer inventory?
Poor communication, slow decisions and coordination problems can cause average costs to rise as a business becomes very large.
What are diseconomies of scale?
Fixed costs rise from $60,000 to $90,000 after automation, while variable cost falls from $15 to $10. Selling price remains $25. This is the break-even output both before and after automation.
What is 6,000 units?