Question

Tomate, Inc., a tomato ketchup manufacturing company, was producing at 75 percent of its production capacity, which was 500,000 bottles a year. A retail giant from a different region offered to buy 150,000 bottles of ketchup at $2 per bottle. The normal selling price is $2.25 bottle. Based on the given scenario, which of the following tactical decision alternatives should Tomate, Inc., consider?

a. Sell-or-process further
b. Keep-or-drop
c. Make-or-buy
d. Accept-or-reject special order

Answer 1

Answer: Tomate Inc can consider an Accept-or-reject special order

Explanation: Accept or reject special order is used when a customer requests for a large amount of goods or product from a manufacturer usually for lesser price than what the manufacturer sells for.

The accept or reject special order is used to determine if the "special order" is profitable or not.