Clearhear Cost Scenerio

ClearHear is a cell promise manufacturer which offers an important and a beta influence cell yell to various clients. Kendra Sherman is a business development specialist which has recently sourced a potential sale to good-looking Box, a phone service provider. heroic Box has requested 100,000 units of the of import model cell phone for use in an upcoming promotion. Big Box has immovable that they are volitioning to pay $15/unit for the alpha model. Kendra is authorizedly working with Lisa Norman, production manager for ClearHear, in beget the best substitute(a) for filling this allege given that Lisa has 70,000 units more(prenominal) which she is able to have over the next three months. Additionally, Kendra has learn that Original Equipment producer (OEM) can produce 100,000 units of equal property for $14/unit. ClearHear’s statement of values establishes the goals of keeping employees working, providing customers with graphic symbol products on time, an d treating business partners fairly. Additionally, Kendra is attempting to achieve maximum positivity which offers several(prenominal) alternatives to consider. This paper will explore the woo of various alternative solutions in skirmish the end goals of ClearHear. The first alternative Kendra and Lisa aim is for ClearHear to produce the 100,000 units at a price of $15/unit. veritablely ClearHear has an excess counterbalance capacity of 70,000 units. This alternative offers the benefit of utilizing the plant to ripe capacity. However, the current cost to produce the alpha model is $17/unit in variable and restore costs. However, as production increases fixed cost/unitwill go down which will decrease wide-cut unit cost. If the total cost/unit reduces costs by $3/unit or more hence the profitability will be achieved. Also, there is an opportunity cost of producing the additional 30,000 units beyond capacity needed to fill the order at the $15/unit price point sooner of the current $20/unit price. This would cr! eate a famine of yield to current customers and may force...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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