5. Students may suggest many possible strategies—there is no single
“right” answer. Two possible strategies are: (a) raise the selling price of
the Y-30 enough to provide a satisfactory margin; and (b) discontinue
the Y-30 and focus all available resources on the X-20. The price of the
X-20 might even be decreased to increase the volume of sales, if the
company has adequate capacity to do so. Before taking any action, an
action analysis report should be prepared as discussed in Appendix 8A.
Case 8-33 (120 minutes)
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