Question

Prepare a​ product-by-value analysis for the following​ products, and given the position in its life​ cycle, identify the issues likely to confront the operations​ manager, and his or her possible actions. Product Alpha has annual sales of 500 units and a contribution of $ 3 comma 500 per​ unit; it is in the introductory stage. Product Bravo has annual sales of 2 comma 500 units and a contribution of $ 2 comma 500 per​ unit; it is in the growth stage. Product Charlie has annual sales of 4 comma 500 units and a contribution of $ 2 comma 000 per​ unit; it is in the decline stage. ​Product-by-value analysis Product Individual dollar contribution Total annual dollar contribution Alpha ​$ nothing ​$ nothing Bravo ​$ nothing ​$ nothing Charlie ​$ nothing ​$ nothing

Answer 1

Answer:

Product   Individual Dollar contribution      Total annual dollar contribution

Alpha             $3,500                                     $1,750,000

Bravo             $2500                               $6,250,000

Charlie             $2000                                      $9,000,000

Explanation:

According to the scenario, the given data are as follows:

1. Alpha annual sales = 500 units

Alpha contribution per unit = $3,500

So, Individual dollar contribution = Alpha contribution per unit

Individual dollar contribution = $3,500

and, Total annual dollar contribution = Alpha contribution per unit × Alpha annual sales

= $3,500 × 500 units

= $1,750,000

2. Bravo annual sales = 2,500 units

Bravo contribution per unit = $2,500

So, Individual dollar contribution = Bravo contribution per unit

Individual dollar contribution = $2,500

and, Total annual dollar contribution = Bravo contribution per unit × Bravo annual sales

= $2,500 × 2,500 units

= $6,250,000

3. Charlie annual sales = 4,500 units

Charlie contribution per unit = $2,000

So, Individual dollar contribution = Charlie contribution per unit

Individual dollar contribution = $2,000

and, Total annual dollar contribution = Charlie contribution per unit × Charlie annual sales

= $2,000 × 4,500 units

= $9,000,000