Hi John!
In Bath co, it says that division B:
Maximum annual production and sales of sets of fittings (units) 200,000
(including internal and external sales)
Maximum annual external demand for sets of fittings (units) 180,000
Maximum annual internal demand for sets of fittings (units) 80,000
- In part (a), to calculate the total sales of division B,
120,000 units are sold externally and 80,000 units are sold internally.
1. Why priority has been given to internal sales and not to external sales? There is no mention in the scenario that for part (a) that sales has to be made internaly first.
Please clear this doubt!
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dec 2011
8y ago#1It is mentioned in the scenario!!
The question says that currently (which is what is relevant for part (a)) Division A is only allowed to purchase fittings from Division B. Since A is currently producing 80,000 units they must be getting them from B!
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