The Northern Division of CPP Corporation Supplies Parts to Its

question 38

Multiple Choice

The Northern Division of CPP Corporation supplies parts to its Southern Division. These parts are also available in the market from other suppliers. Northern Division is operating at 80% capacity, with a variable cost per unit of $6. Because of a personality conflict between the two division managers, however, Southern has elected to buy the part from outside suppliers at $7 per unit. As a result of this action, CPP Corporation will be:

• A) better off.
• B) worse off.
• C) forced to close Northern Division.
• D) forced to close Southern Division.

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Definitions:

Off-Peak Periods

Times when demand for a product or service is lower than usual, often leading to lower prices or rates as incentives.

Peak Periods

Peak periods are times of high demand or activity within a business or system, often requiring additional resources to meet customer needs or service levels.

Shifting Demand

Refers to the movement or change in consumer demand for a product or service over time, often influenced by factors such as seasonal changes, price fluctuations, and changes in consumer preferences.

Revenue Management

The application of disciplined analytics that predict consumer behavior at the micro-market level to optimize product availability and price to maximize revenue growth.