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A very confused manager is reading a two-page report given to him by his student intern."She told me that she had my problem solved,gave me this,and then said she was off to her production management course," he whined."I gave her my best estimates of my on-hand inventories and requirements to produce,but what if my numbers are slightly off? I recognize the names of our four models W,X,Y,and Z,but that's about it.Can you figure out what I'm supposed to do and why?" You take the report from his hands and note that it is the answer report and the sensitivity report from Excel's solver routine.
Explain each of the highlighted cells in layman's terms and tell the manager what they mean in relation to his problem.
Break-even
The point at which total costs and total revenue are equal, meaning that a business neither makes a profit nor suffers a loss.
Dumping
The practice of a country or company exporting products at a price lower than the domestic market price, often considered unfair competition.
Unreasonably Low Prices
Pricing strategies that are significantly below the market average or cost of production, often used to eliminate competition or enter new markets.
Robinson-Patman Act
A United States federal law aimed at preventing unfair competition and price discrimination among businesses.
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