Pev - June 08

aimeexox

I know this is very late and completely understand if no one wants to help meeeee.

But I don't understand task 2.2 and the point in it? and the recommendations?!

I have a feeling this is going to roll back around.

davidg

it just asks you to find out how much money you will save if you buy from romania, the way the answer is presented was wierd, but if you read the tutorial note after that it seems thats how everybody answered the question, i did it that way.

Terdoo

Re PEV

Task 2.2a

Sales volume £1,200,000

Sales reduction (£1,200,000 * 0.50p) = 600,000
Selling/Distribution (1,000,000 - 400000) = 600,000
Total 2,400,000

2.2b 2,400,000/3,000,000 * 100 = 85%

hope this helps

Rinske

Hmm, the point of the question is to compare the costs between doing the manufacturing inhouse or would it be cheaper to outsource it. This would be something you want to know if you have a manufacturing business. If you could get the same product for a lower price, there is not much use in creating it yourself (assuming the quality is equal etc).

It's all a matter of weighting out different costs for the company and it is usually quite an important process.

For example:
If you sell chairs at 60 each and they cost you 50 to make them, you make a profit of 10 each, but if instead of creating them yourself, you could buy them for 40 each including shipping, you could make a profit of 20 per chair instead.
As long as the quality is the same, you could increase your profit by just buying the chairs and selling them on.

davidg

terd your on about june 09

aimeexox

Ohhhhhhh right! Thanks!! It makes alot more sense now, the examiners recommendations were just too wordy for me! We haven't been taught anything like that at college

Terdoo

pev

OOps june 09