Subject category:
Case Method and Specialist Management Disciplines
Published by:
Harvard Business Publishing
Version: 28 June 1994
Length: 4 pages
Data source: Generalised experience
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Abstract
A department general manager has to decide whether or not to add a lightweight compressor to the line, what price to charge, and what volume to produce. The analysis requires maximizing contribution in a situation where one factor is constrained. As such, it takes into account opportunity costs and shadow prices as well as fixed and variable costs, demand curve analysis, and sunk costs. Also invites discussion about the proper measurement, offering departmental profits and return on sales as candidates.
Subject category:
Case Method and Specialist Management Disciplines
Published by:
Harvard Business Publishing
Version: 27 June 1994
Length: 6 pages
About
Abstract
A department general manager has to decide whether or not to add a lightweight compressor to the line, what price to charge, and what volume to produce. The analysis requires maximizing contribution in a situation where one factor is constrained. As such, it takes into account opportunity costs and shadow prices as well as fixed and variable costs, demand curve analysis, and sunk costs. Also invites discussion about the proper measurement, offering departmental profits and return on sales as candidates.
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Subject category:
Case Method and Specialist Management Disciplines
Published by:
Harvard Business Publishing
Version: 27 June 1994
Length: 6 pages