A Strategy of Dropping a Product from the Product Line

question 63

Multiple Choice

A strategy of dropping a product from the product line, usually in the decline stage of the product life cycle, is referred to as _________.

• A)diversification
• B)aggregation
• C)paring down
• D)deletion
• E)harvesting

---

Definitions:

Variable Costs

Expenses that are directly tied to the rate of goods produced or services sold, such as the cost of materials and labor involved.

Fixed Costs

Costs that remain constant for a business over a period, regardless of the level of goods or services produced.

Composite Units

Units formed by combining different but related items, often used in production or inventory management.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes to covering fixed costs and generating profit.