A decision to make or eliminate an unprofitable product is a
A) special-order decision.
B) keep-or-drop a product-line decision.
C) make-or-buy decision.
D) Both b and c are correct.

Question

Quizplus · Accepted Answer

Keep-or-drop a product-line decision involves analyzing the profitability of a specific product or product line and deciding whether to continue producing it or discontinuing it. This decision is relevant when a product or product line is no longer profitable or has become obsolete. On the other hand, special-order decisions involve analyzing whether to accept a one-time order that is outside the company's normal business operations. Make-or-buy decisions involve analyzing whether to produce a product in-house or buy it from an external supplier. Although both B and C relate to product line decisions, the situation described specifically relates to whether or not to eliminate a product that is no longer profitable, making B the most appropriate answer.

A Decision to Make or Eliminate an Unprofitable Product Is