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Unformatted text preview: strategic factors need to be considered .These include - Will this order affect any regular sales ? Is the company looking for a permanent solution to its idle-capacity or are special orders becoming habit -- a response pattern that may be eventually prove disastrous ? Will acceptance adversely affect the company's normal distribution channels ? Will it be an opportunity for the company to explore the new market for its other products ? Can this be taken as the company's penetration pricing policy for the new market ? Any reaction from competitors in the new market ? (b ) The special order needs only 25 setup hours, whereas the company has 50 hours of excess setup capacity.In this case there will be no need for expansion of capacity with attendant increase in fixed costs.So the total income will increase by Rs.7000 in the order of accepted. Order to be accepted or not...
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This note was uploaded on 02/29/2012 for the course E 101 taught by Professor Sfere during the Spring '12 term at Abilene Christian University.
- Spring '12