Brandon Production Is a Small Firm Focused on the Assembly

question 21

Essay

Brandon Production is a small firm focused on the assembly and sale of custom computers.The firm is facing stiff competition from low-priced alternatives,and is looking at various solutions to remain competitive and profitable.Current financials for the firm are shown in the table below.In the first option,marketing will increase sales by 50%.The next option is Vendor (Supplier)changes,which would result in a decrease of 10% in the cost of inputs.Finally,there is an OM option,which would reduce production costs by 25%.Which of the options would you recommend to the firm if it can only pursue one option? In addition,comment on the feasibility of each option.
Business Function Current Value
Cost of Inputs $50,000
Production Costs $25,000
Revenue $80,000

---

Definitions:

Time Inconsistency

The tendency of a person or entity to change their planned course of action over time due to a change in preferences.

Self-Control Problems

Self-control problems refer to the difficulty individuals face in resisting short-term temptations in order to achieve long-term goals.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method or decision.