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Management of Business System
Pages 7 (1757 words)
The sale data of Chelwood Country Products related to 20 items on price, volume, income and cost were examined to identify any problem in respect of their product to improve performance. On analysis only four items, E, F, J and O contributed 80% of the total sale income…
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 add ...
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