Reliable Packaging, Which Has Competed on Cost for Several Years

question 39

Multiple Choice

Reliable Packaging, which has competed on cost for several years, has found itself losing market share because of the cost-cutting initiatives from its competitors. In order to survive, Reliable Packaging should consider:

• A) replacing its top management team
• B) firing employees
• C) changing its technology
• D) changing the location of its firm
• E) diversifying into industries where cost pressures are less severe

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Sales Units

The number of individual items or units a business sells within a specific period.

Variable Expenses

Expenses that change in proportion to the activity of a business such as production volume or sales.

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.