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 company managers 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

Answer 1

Instituting plant upgrade option B and perhaps combining the production of branded footwear in just one plant to only gain the payment of production run setup costs one time. For a company to become profitable income must surpass expenditures. The profits for the company are determined by examining what is left over after expenditures are deducted from overall income. Any cost-saving processes instigated by a company will bring expenditures down and upsurge overall profitability.