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Merton Truck Case Solution
In: Business and Management. Maybe we should change our product mix. We don't seem to be making a profit on our Model truck. Why don't we just stop making it altogether?
Merton Truck Company Case Solution & Answer
The president suggested that they should change their product mix to increase their profits. Financial results show that Model truck has a lower contribution margin than Model truck. Maybe they can acquire machines from outside suppliers and release the capacity problems in its engine assembly department to the truck model The company was unable to find the best product mix for Model and Model , the point where they can maximize their profits while keeping optimal capacity utilization for the four manufacturing departments includingengine assembly, metal stamping,Model assembly, and Model assembly. First, we have found the contribution margin on both the models. Contribution margin on Model is and contribution margin on Model is , therefore Model is more profitable than Model