Dansk Minox Case Study Essay

Problem A/S Dansk Minox is a confederation based in Copenhagen, which specializes in branded vacuum-packed meat and other aliment merchandises. Through consumer survey, the company found that in that location was a large untapped mart for a Complete meal mathematical product which included bitd pork along with a vacuum-sealed bag of ruby- crimson crochet salad. After long discussions among the marketing and finance departments, the fuck meal pack was introduced at a value of $ 8.20 per pack of 1 kg. It sold only 30 lashings as against the budgeted sales of 85 oodles. The line facing the company is that whether it has to stop and action of the complete meal product or establish a hot consumer price of $ 6.85 per pack, in order to hike sales. Considerations and AnalysisIn order to find the course of action we may interpret at the following facts and considerations.Consumer Price 8.20 6.85 retail merchant Price 5.72 4.78Variable Cost 3.49 3.41 book of account Sales ( in kgs) 30000 85000Advertising Costs 0.3 0.3 jar on Profit 41,400 90,950As we stern see, impact on profit is higher(prenominal) when 85000 kgs of complete meal is sold at $6.85/kg, rather than selling 30000 kgs at $ 8.20/kg. Now, another(prenominal) point to note is if production expenses ar to be revised to $ 1.20/kg, then on a full equal basis, the complete meal would exist. Total unit bell (new) = Total unit toll (old) doing expenses (old) + Production expenses (revised) Total unit cost (new) = 4.64 0.54 + 1.20 = $ 5.30And Profit per unit would be = retailer price Total unit cost (new) = 4.78 5.30 = (-0.52) (i.e) there would be a impairment of $ 0.52/kg, on a full cost basis, when the complete meal is sold at $ 6.85. Conclusion and RecommendationsThe point to be focused here is that though the new product might sell 85 tons at a revised price of $ 6.85 per pack, it will incur losses on a full cost basis. in any case it is not feasible to lower the production cos t anymore because, the resources of A/S Dansk Minox which were specialized for meat processing were instantly processing Vegetables. This is not their core talent and hence they would incur more costs in performing activities that they do not specialize in. Furthermore, the need for a superstar package containing sliced pork and carmine cabbage salad is itself questionable because the same packs argon also idiosyncraticly available and these individual packs are of better part because slice pork is Dansk Minoxs speciality and red cabbage salad is its competitiors specialty.Hence, it is recommended that Dansk Minox stop advertise production of complete meal (because red salad is not its core competency) and concentrate on selling its standard packs, which are in fact having a significant gain ground in their sales or the management can look to collaborate with the trounce red cabbage salad making company and together give the customers the dress hat quality of complete mea l at the best price. The final decision would however be dependent upon managerial discretion and organizational guidelines/objectives.