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Issue:

Business

 

Written by:

Eleanor W

 

Date added:

October 14, 2012

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 786

 

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8617 times

 

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In both these cases, the expenses are higher for special order phones. Thirdly, there is an inventory cost of 10Dhs per unit stored which is applicable to any type of phone and lastly, a back order cost is incurred for every unit which is not shipped on time. This cost is irrelevant for consumer phones as the total demand does not have to be met fully and units can be sold at any level up to the market demand...
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For commercial phones, back order costs are 10Dhs per unit not shipped on time, and 15Dhs per unit for all special order phones. Once an order has been accepted, the producer assumes full responsibility to ship the phones on time so as to avoid paying this penalty charge. The following table summarizes the cost and profit figures for producing one unit of each of the different types of cell phones...
displayed 300 characters

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