A decision to discontinue a given product on the basis of contribution margin data should include consideration of the probable impact of the discontinuance on the sales of other products.

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Discontinuing a product can have a ripple effect on the sales of other products. For example, a complementary product may experience a decrease in sales if the discontinued product was often purchased together with it. Therefore, it is important to consider the potential impact on overall sales before making a decision to discontinue a product based solely on its contribution margin.

A Decision to Discontinue a Given Product on the Basis