If a company wants to enhance the profitability of differentiating its branded p

Question

If a company wants to enhance the profitability of differentiating its branded product offering from rivals by offering buyers 500 models/styles to choose from, then it should consider reducing the $14 million annual costs for production run setup costs associated with producing 500 models/styles at each of its plants by
instituting plant upgrade option B (at a cost of $8 million per million pairs of plant capacity).
cutting the percentage use of superior materials (to help offset some of the $14 million in annual production run setup costs for 500 models/styles).
building plants in all four geographic regions and producing 500 models/styles at each plant.
instituting plant upgrade option C.
doubling the expenditures for enhanced styling/features

Explanation / Answer

Cutting the percentage use of superior materials and conserving on expenditures for TQM/Six Sigma quality controls at each of the company's plants to help pay for the $14 million in annual production run setup costs for 500 model/styles.

the reduction is the percentage of the superior products will help the company to utilize that ammount in some other production.

hence, the correct option is B.

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