Prepare a product by value analysis for the following products and given the pos
ID: 2416613 • Letter: P
Question
Prepare a product by value analysis for the following products and given the position in its life cycle, identify the issues likely to confront the operations manager, and his or her possible actions. Product Alpha has annual sales of 1,000 units and a contribution of $2,500 per unit, it is in the introductory stage. Product Bravo has annual sales of 1,500 units and a contribution of $3,000 per unit, it is in the growth stage. Product Charlie has annual sales of 3,500 units and a contribution of $1,750 per unit, it is in the decline stage.
Explanation / Answer
Value Analysis:
Alpha Bravo Charlie Annual Sales 1000 1500 3500 Contribution 2500 3000 1750 Total contribution 2500000 4500000 6125000 Issues to be faced by operations manager 1) improve the sales of charlie as it is in the declining stage 2) Improve the contribution margin per unit for charlie by reducing the direct cost 3) improve the contribution from Alpha.