A Brief Report determining the Production Level which should be adopted by Cuddly Cards

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A Brief Report determining the Production Level which should be adopted by Cuddly Cards

Introduction

Cuddly cards have requested a brief report analysing the different combinations of production concluding with the most profitable and least profitable methods. The data given were predictions summarised as a probability distribution of possible sales, fixed and variable costs and two possible retail prices.

The difficulty with my predictions lay in the fact that there was a great deal of uncertainty. The five different sales volumes were summed up as probabilities which lack 100 % accuracy. Fixed costs could alter between £20,000 and £25,000 depending on rates and rent. There was also a possibility that sales revenue per hundred cards could change from £50 to £40 due to the competitiveness of that market. With so many uncertainties, the only solution was to draw up three tables comprising of each individual possibility with all of the different variables.

Executive Summary

The main findings that have been gathered through the many calculations shown in the three tables will aid Cuddly Cards in making their decision about their production level. If Cuddly Cards take into consideration the most probable demand