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ii. Cost Analysis
There are four costs associated with producing the different types of cell phones. First of all, there is the cost of raw materials; this varies depending on the type of phone. Secondly, there is the cost of labor. This remains constant at 2Dhs per minute; however, the time it takes to manufacture each type of phones differs. In both these cases, the expenses are higher for special order phones. Thirdly, there is an inventory cost of 10Dhs per unit stored which is applicable to any type of phone and lastly, a back order cost is incurred for every unit which is not shipped on time. This cost is irrelevant for consumer phones as the total demand does not have to be met fully and units can be sold at any level up to the market demand. For commercial phones, back order costs are 10Dhs per unit not shipped on time, and 15Dhs per unit for all special order phones. Once an order has been accepted, the producer assumes full responsibility to ship the phones on time so......
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Title: Case
Approximate Word Count: 754
Approximate Pages: 4 (250 words per double-spaced page)
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