Question 1: Suppose you have owned and operated your own package delivery business for a year. You would like to engage in competitive benchmarking to make sure your business runs as smoothly as possible. What firms and processes would you consider for benchmarking? Defend your choices of these firms and processes. What specific metrics would you focus on and why?
Question 2: Boston Limited is a Small and Medium Enterprise (SME) specialized in manufacturing thermostats. They recently launched a high-tech thermostat for industrial heating systems. Current variable costs are estimated at $30 per unit and fixed costs are about $65000 per year. Management is concerned about success of the new product.
a) If the new thermostat is sold for $120, use algebraic method to find the number units that must be produced to break-even?
b) Forecasted sales for the first year are 5,000 units if the price is reduced to $100. With this pricing strategy, what would be the product's total contribution to profits in the first year?