A Company Has Three Products (X, Y, and Z) That

question 12

Multiple Choice

A company has three products (X, Y, and Z) that it sells, packs, and ships to its customers. Because the products have different sizes they also have different packing and shipping costs so we will use a new measure-a packing/shipping unit. Because Product Y is the smallest of the three products, we will assign it a value of 1 packing/shipping unit. Product X is twice as big as Product Y and Product Z is four times as big as Product Y. On a monthly basis, this company sells an average of 1,500 units of Product X, 800 units of Product Y, and 60 units of Product Z. If the company spends on average of $3,720 each month on total packing/shipping costs, what amount should it allocate to Product Z per month (to the nearest dollar amount) ?

• A) $101
• B) $169
• C) $221
• D) $498
• E) $736

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Definitions:

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.

Potential Profitability

The capacity of a business venture or investment to generate earnings and achieve financial success.

Under-served Markets

Markets or segments that have insufficient access to products, services, or resources, often due to economic or geographic reasons.