A company is deciding where to assign its summer intern.The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue)by $25,000.If sales (revenue)is divided into the three categories shown in the table,where should the manager assign the intern to maximize profits?

Question

A company is deciding where to assign its summer intern.The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue)by $25,000.If sales (revenue)is divided into the three categories shown in the table,where should the manager assign the intern to maximize profits?
A company is deciding where to assign its summer intern.The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue)by $25,000.If sales (revenue)is divided into the three categories shown in the table,where should the manager assign the intern to maximize profits?

Quizplus · Accepted Answer

The Answer is The intern would save $10,000 in the supply chain,or show a profit of $10k.Profit from the increase in sales would be equal to revenue - costs.If revenue is X,then costs would be (.35+.25)X.Thus profit would be X - .6X or simply .4X.$25,000(.4)= $10,000 so the manager is neutral on where to assign the intern.

A Company Is Deciding Where to Assign Its Summer Intern