Question

A company currently has two product lines and is considering dropping which product?

1) Product 123
2) Product 456
3) Product 789
4) Product 987

Answer 1

The decision on which product a company should drop involves examining factors such as depreciation, market depression, and derived demand to determine each product's viability.

Step-by-step explanation:

The question concerns a business decision pertaining to product lines and whether a company should consider dropping a particular product. When assessing which product to potentially drop, a company might look at various factors such as profitability, depreciation, market depression, and derived demand.

For instance, if Product 123 has a high rate of depreciation and is in a market currently experiencing a depression, then the derived demand for this product could be low, making it a candidate for discontinuation. In contrast, if Product 456 has low depreciation, operates in a buoyant market, and benefits from high derived demand, it would likely be a keystone product worth keeping. Therefore, the decision should be made after carefully evaluating each product's performance and market conditions.