Beverly Hills Fan Company is located in Woodland Hills, California. It is a relatively small company, with 23 employees and less than $ 10,000,000 in sales. Management believes that there is an opportunity for growth in the ceiling and lighting fan market (ceiling fans and lighting), especially in Mexico and Canada.
Next, the letter of the president of the company in the annual report:
An aggressive program of product development began last year, which resulted in plans to introduce new models of ceiling fans to the market. A famous designer produced the fan lines with the Beverly Hills Fan and LA Fan models, including a collection of showrooms for the markets of architects and designers. Both have received acclaim from critics and the commitments to order this year are outstanding.
In addition, our Custom Color and Special Order fans continue to increase in popularity and sales, as our customers demand fans that are in accordance with their decorating tastes.
At present Beverly Hills Company offers a line of more than 100 models of ceiling fans in contemporary, traditional and transitional style.
Instructions: Answer the following questions
(a) What points should management consider before deciding to offer fans with special orders to customers?
(b) How does the incremental analysis help in this decision?