1705

Problem

Susan Breck, president of Breck Chemical Corporation, added three new products to the firm’s line 2 years ago to serve the needs of five NAICS groups. Each of the products has a separate advertising budget, although they are sold by the same salespersons. Susan requests your assistance in determining what type of information the firm should gather to monitor and control the performance of these products. Outline your reply.

Step-by-step solution

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Step 1/2

The information necessary to monitor and control the performance of products would include the following:

1. Market share

2. Average revenue per sales representative

3. Number of customers

4. Sales relative to capacity

5. Sales growth rate

6. Contribution margin

7. Return on investment

Step 2/2

This information helps to analyze and compare the performance of the different products with the successful products of the company and the market. It also enables one to compare the products in terms of input and output.

For example, Contribution margin helps to evaluate the performance of particular activities in reference to demand these products make on the organizations resources.