Two Different Products Are Being Considered for Production

question 5

Essay

Two different products are being considered for production. The cost structures are listed below on a per unit basis. Which product should be produced, using revenue retrieval analysis?
$$\begin{array} {| l | l | l | l | l |} \hline\text { Product } & & & & \\\text { Blue } & \text { Resale Revenue } & \text { Recycling Revenue } & \text { Processing Cost } & \text { Disposal Cost } \\\hline \text { Part A } & \$ 4.25 & \$ 3.81 & \$ 1.26 & \$ 2.48 \\\hline \text { Part B } & \$ 5.78 & \$ 2.14 & \$ 1.04 & \$ 1.07 \\\hline \text { Part C } & \$ 2.13 & \$ 0.87 & \$ 0.92 & \$ 0\\\hline\end{array}$$ $$\begin{array} {| l | l | l | l | l | } \hline \text { Product } & & & & \\\text { Yellow } & \text { Resale Revenue } & \text { Recycling Revenue } & \text { Processing Cost } & \text { Disposal Cost } \\\hline \text { Part A } & \$ 5.84 & \$ 6.54 & \$ 2.16 & \$ 0.88 \\\hline \text { Part B } & \$ 6.14 & \$ 5.45 & \$ 3.48 & \$ 0.97 \\\hline \text { Part C } & \$ 0.85 & \$ 0.69 & \$ 0.41 & \$ 0.31 \\\hline\end{array}$$

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Definitions:

Lower-Income Segment

A portion of the population or market characterized by lower earnings, often targeted by businesses offering more affordable products or services.

Developing Economies

Countries that are in the process of industrialization, with relatively low per capita income and seeking to improve their economic base.

Market-Creating Innovations

Innovations that establish new markets by solving unserved or underserved problems and fulfilling unmet needs.

Performance Innovations

Innovations aimed at enhancing the efficiency, productivity, or effectiveness of operations in organizations or systems.