Given the contribution made on each of the three products in the following table

Question

Given the contribution made on each of the three products in the following table and their position in the life cycle, identify a reasonable operations strategy for each Product Contribution 1%of selling price 30 30 50 1%: total annual contribution divided by total annual sales) 50 40 10 Position in Life Cycle Growth Maturity Decline Product Desktop computer Netbook computer MP3 player Identify possible strategies for the desktop computer. (Mark all that apply) A. Attempt to innovate high-volume production B. Increase capacity c. Develop supplier and distribution systems D. Attempt to make production facilities more efficient Identify possible strategies for the netbook computer. (Mark all that apply) A. Increase capacity B. Modify and improve the production process () C. Attempt to innovate high-volume production D. Improve cost control for profitability and market share Identify possible strategies for the MP3 player. (Mark all that apply) A. Consider terminating production B. Improve cost control for profitability and market share C. Attempt to innovate high-volume production D. Attempt to develop an improved product

Explanation / Answer

Q1) As desktop computer is in Growth phase with high company contribution to revenue, the possible strategies would include -

A) Increase capacity to catch up with the growth

D) Attempt to make production facilities more efficient

Q2) As Netbook computer is in Maturity phase i.e. at its highest sales, the possible strategies would include -

C) Attempt to innovate high-volume production

D) Improve cost control for profitability and market share

Q3) The possible strategies for the MP3 player considering it is in Decline phase with very low company contribution and high product contribution will be -

A) Consider terminating production

D) Attempt to develop an improved prodyct

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