Thus an optimal product mix consisting of only D, E, F, H, I, J, K, O, P, R has been proposed. Other products can be discontinued. Modular process design and business process management system are recommended to implement along with this revised optimal product mix. This affords flexibility and enhances the capability to handle competition. Grouping of similar products and their standardised production, while maintaining separate production lines for specialised products, is advised as specific standardisation steps. First the proposed product mix of ten items may be tested for a reasonable period, evaluated including demand fluctuations, competition and market share information. Thus a more detailed Pareto analysis can be done. The limitation of the present study is due to the available data lacking in these respects.
When a company produces and sells many items, some items may fetch large incomes and some others small incomes. These incomes are related to sale price and sale volume of each product. The company is interested in maximising its total sale income with least cost, so that profit can be maximised. Reducing product mix is one way. In this paper, a situation pertaining to Chelwood Country Products is evaluated for these possibilities.
Green & Krieger (1992) used Pareto analysis, sensitivity analysis, optimal product positioning, line extension, segment-based addition and response of competitors. The data provided in the case of Chelwood are not enough for such detailed study.
Ordover & Panzar (1980) showed that when user demands are independent, a uniform price higher than marginal cost can be Pareto non-linear outlay schedule. When users compete for products, their demands are inter-related. Then Pareto improvement is not possible. This aspect is not known in the case of Chelwood. We may assume independent user demands.
Dudek-Burlikowska & Szewieczek (2007) proposed quality research methods for estimation of sales process with Pareto analysis, Ishikawa diagram and process analysis. Process management approach is to be used in our study when better options are