A Large Greenhouse Grower Wanting to Source a Suitable Organic

question 54

Multiple Choice

A large greenhouse grower wanting to source a suitable organic liquid fertilizer contacted Organics.The grower is willing to pay a premium price for Organics' product.Accepting the order would mean Organics could not completely fill existing orders to its current customers.Organics desires the new business but wants to maintain its existing customer base.Which of the following strategies would provide Organics with the best possible solution to this problem?

• A) Abandon all but the most important of the existing orders and fill the new order.
• B) Present an ultimatum on existing orders offering delivery on a later date or nothing at all.
• C) Comply with existing obligations, fill the orders, and offer the new business what is left.
• D) Offer a price break on existing orders in return for varying quantity and delivery date.

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Definitions:

MC

An abbreviation often used for Marginal Cost, which represents the cost of producing one more unit of a good.

AP

Advanced Placement, a program in the United States and Canada offering college-level curriculum and examinations to high school students.

AVC

Average Variable Cost; the total variable costs divided by the number of units produced, indicating the variable expense per unit of output.

MP

Marginal Product, which refers to the increase in output that results from employing an additional unit of input, holding all other inputs constant.