ADMS3530-Assignment2-F06

ADMS3530-Assignment2-F06 - ADMS3530 3.0 Assignment #2...

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ADMS3530 3.0 Assignment #2 Page 1 AK/ADMS3530 3.0 Fall 2006 Assignment #2 Instructions: (1) This assignment is to be done individually. You must sign and submit the standard cover page supplied as the last page of this assignment. (2) This assignment is due on the last class . (3) This assignment is to be handwritten . Work that is too difficult to read due to messiness and poor handwriting will receive zero credit. You must show your work to receive full credit. (4) This assignment carries a total mark of 100 points . (5) For Internet section students , the assignment must be uploaded to the Centre for Distance Education: http://www.atkinson.yorku.ca/cde/assignmentupload and identified precisely in accordance with the course outline by Tuesday, November 28, midnight . (6) Late assignments will not be accepted whether for technical or any other reason. Question 1 – Apple Omni-Pod (20 marks) Apple Inc. remains on the cutting edge of technology and does it again with the Omni-pod. Approximately the size of an ipod, the Omni, in one machine, integrates MP3, HD Video and Wireless telephone capabilities (and…. will even make you a cup of coffee to compete with Tim Horton’s ). R&D for this machine has been steep costing $330 million. The Apple marketing department estimates annual sales of 700, 1,500, 900, 800 and 650 million units for years one to five respectively and which time, the life cycle will end. Pricing will be aggressive. Apple will sell the Omni at a premium pricing of $400 in the first year and then reduce it by $50 a year to appeal to the mass markets. Fixed costs are $43,000 million annually and variable costs are estimated at 35% of the selling price. In addition, the Apple accounting department will allocate general overhead of $80 million annually. The Omni will be manufactured in Singapore in facilities already owned by Apple but currently vacant with a rental value of $10,000 million annually. Unfortunately, as consumers buy the Omni, Apple expects profits of existing Apple products, will be reduced by $50 million annually during the Omni product life cycle. The manufacturing equipment will cost $200,000 million, $30,000 million to
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ADMS3530-Assignment2-F06 - ADMS3530 3.0 Assignment #2...

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