Which one of the following objectives is likely to be most relevant to a small manufacturer of solar-powered phone chargers during a period when electricity...
Question 1 Report
Which one of the following objectives is likely to be most relevant to a small manufacturer of solar-powered phone chargers during a period when electricity prices are rising? The manufacturer has received more enquiries from retailers, but it must decide whether to focus on higher sales, lower unit costs, staff training or a new product range. Its objective needs to reflect both the market opportunity and its limited production capacity.
(a) Which one of the following objectives best uses the market opportunity?
A Increase sales of solar chargers by 15% in the next 12 months.
B Close the manufacturing workshop immediately.
C Remove all product warranties.
D Stop supplying retailers. [1]
(b) Explain one reason why capacity should be considered before setting this sales objective. [2]
(c) What action could the manufacturer take if demand is greater than its current capacity? [2]
Answer Details
(a) Increasing sales of solar chargers by \(15\%\) in the next 12 months best uses the market opportunity created by rising electricity prices and increased retailer enquiries. [1]
(b) The manufacturer may not have enough workers, machinery, or materials to make the extra chargers. [1] A sales target above capacity is unrealistic and may cause late deliveries or poor quality. [1]
(c) It could employ or train more workers [1] and buy or lease additional machinery. [1] Using overtime or outsourcing some production would also be valid responses.
Download The App On Google Playstore
Everything you need to excel in your exams
