Question

According to information found on the production analysis page of the Inquirer, Baldwin sold 1125 units of Boat in the current year. Assuming that Boat maintains a constant market share, all the units of Boat are sold in the Nano market segment, and the growth rate remains constant, how many years will it be before Boat will not be able to meet future demand unless the company adds production capacity? Exclude any existing inventory.

A. 2 years
B. 3 years
C. 4 years
D. 5 years

Answer 1

To determine how many years it will be before Boat will not be able to meet future demand,without knowing the future demand or the growth rate, we cannot determine the exact number of years.

Step-by-step explanation:

To determine how many years it will be before Boat will not be able to meet future demand, we need to analyze the given information. We know that Baldwin sold 1125 units of Boat in the current year, and Boat maintains a constant market share in the Nano market segment. If the growth rate remains constant, we can assume that the number of units sold will increase by the same rate every year.

Let's assume the growth rate is x units per year. In the first year, Baldwin sells 1125 + x units, in the second year 1125 + 2x units, and so on. We want to find the year when the number of units sold is equal to or greater than the future demand.If we compare the number of units sold each year with the future demand, we can determine the number of years it will take. Based on the information given, it is not possible to determine the exact future demand or the growth rate, so we cannot come up with a precise answer. Therefore, we cannot determine whether Boat will be able to meet future demand in 2, 3, 4, or 5 years.

When considering how many years it will take before Baldwin's Boat product will not be able to meet future demand in the Nano market segment without adding production capacity, we need to consider the growth rate of demand. However, the provided information does not include the exact growth rate. Without the specific growth rate, we can't calculate the exact time it will take for Boat to reach its production limit. Generally, companies must forecast and plan for increasing demand, especially if market share is constant and the segment is growing. Considering various factors like the growth rate, competitors' strategies, and market trends could provide more insight. Given the lack of specific numerical growth rates in the question, we can only speculate that Baldwin may need to consider expanding capacity within a few years to maintain their market position.