A special order request for 20,000 widgets just showed up on your desk. The customer has...

 

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A special order request for 20,000 widgets just showed up on your desk. The customer has asked for special engraving, at an additional cost of $1 per widget. They are also asking for a 20% discount on your regular price of $10 (so they want to pay $8 per widget). If you have some idle production space, and this job would net $5,000 after all expenses, do you take the special order? A special order request for 20,000 widgets just showed up on your desk. The customer has asked for special engraving, at an additional cost of $1 per widget. They are also asking for a 20% discount on your regular price of $10 (so they want to pay $8 per widget). If you have some idle production space, and this job would net $5,000 after all expenses, do you take the special order?

Answer rating: 100% (QA)

SOLUTION To determine whether to accept the special order we need to calculate whether the additional revenue from the order and the incremental profit generated by the order will be sufficient to cov... View the full answer