Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $60,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 3800 copies. The publisher plans to sell the text to college and university bookstores for $18 each. If the publisher believes that the price per copy could be increased to $21.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticipated?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
- Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $60,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 3800 copies. The publisher plans to sell the text to college and university bookstores for $18 each.
If the publisher believes that the price per copy could be increased to $21.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticipated?
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