________ Is a Strategy Adopted to Eliminate an SBU That

question 76

Multiple Choice

________ is a strategy adopted to eliminate an SBU that is not generating a satisfactory amount of business and that has little hope of doing so in the near future.

• A)Growth
• B)Divestiture
• C)Retrenchment
• D)Stability
• E)Focus

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Definitions:

Bulk Packaging

Packaging method where large quantities of a product are packed together in one container, typically used for transport or wholesale.

Grinding Costs

Costs incurred in the process of grinding materials; typically associated with manufacturing processes that require fine material breakdown.

Investment Center

A subunit of the firm that has decision rights over the amount of capital to be invested, the prices of its products, and the manufacturing process and is usually composed of several profit centers.

Profit Center

A subunit of the firm with the decision rights over prices and manufacturing processes to maximize profit. Profit centers are evaluated on meeting target profits and are composed of several cost centers.