To Maximize Profits, Produce the Product with the Highest Contribution

question 252

True/False

To maximize profits, produce the product with the highest contribution margin per unit of the constraint.

---

Definitions:

High-Low Retailer

A retail strategy where products are initially offered at high prices but then discounted heavily to stimulate sales, often seen in the fashion industry.

Carmex

A brand known for its lip balm products designed to moisturize, heal, and protect the lips.

Noncumulative Discounts

Price reductions on purchases that do not accumulate over time, typically offered as one-time incentives.

Cumulative Quantity Discounts

Price reductions based on the total quantity of goods a customer purchases over a given time period, incentivizing larger orders.