Week 4

Question 1

What are the non-financial factors that need to be taken into account when making a final decision on the production plan

Question 2

Discuss THREE non-financial considerations that would influence the percentage of profit mark-up that they apply on this order

Answer 2

• Emergency order
• Does LSC want the future business?
• Can LSC cope with workload of future orders?
• Signal that end price sends to customer
• Will customer expect same mark-up on all future orders?
• Could future orders with customer expand reputation and lead to additional new customers?
  Total 2 marks
• Would final price be consistent with the market?
• LSC strategy – cost leader or differentiator