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Hallo, Sir!
I hope that you are well.
My question is:
While we are analyzing the relationship between sales volume and profit, we assume that production volume is equal to sales volume. This assumption facilitates linear relationships between production volume and sales revenue.
But, is there a linear relationship between units manufactured, units sold and sales revenue generated IN THE REAL WORLD?
In reality, the assumption that production volume is equal to sales volume may not hold true.
There are various factors that can affect the relationship between units manufactured, units sold, and sales revenue generated. Therefore, in answer to your question the assumption of a linear relationship between units manufactured, units sold, and sales revenue may not always be accurate in the real world.
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