Question
Before identifying a feasible product or process, an idea should be tested along certain parameters which involves a number of steps. Explain the first four steps.
✓
Answer
First four steps are:
- Identification: Identification of a product or service is the first step. The idea provides the concept of the product or service. Already existing products guide the entrepreneur in understanding the scope of inngyations that can be undertaken. If a totally new product is to be launched, then the policy related with advertising, sales promotion, popularizing are to be effectively prepared. A critical analysis of the product in light of the competition to be faced, choices of the customers, extent of the customers, etc., is to be made.
- Evaluation of use and application: The present use of the product/ service is to be found out. This helps in innovating the existing product and in increasing the dependability on the product.
- Level of operation: Depending on the nature of the enterprise, the production is undertaken, the enterprise can be small scale, medium scale or large scale industry. Quantity of production is considered. Requirement of labour, technical experts, skilled labour, etc., all are to be considered.
- Cost: The per unit cost of production is different for different levels of operations. Is the cost competitive? This is to be answered as the price of the product depends on it.
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Similar questions
A hotel had varying number of guests during five weeks. The information regarding the number of guests and the average weekly billing is presented in the following table:
|
Week
|
No. of Guests
|
Average Billed Amount
|
|
1
|
240
|
300
|
|
2
|
120
|
410
|
|
3
|
140
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292
|
|
4
|
160
|
442
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|
5
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180
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480
|
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Number of people who took their meals and the total billing for each of the 5 weeks is in the HOTS following table. What are the unit of sale' and the 'unit price' in this case? If the variable cost is 50% of the sale price, calculate the 'unit cost' and the gross margin' per unit of sale.
|
Weeks
|
Number of people taking meals
|
Total amount billed (₹)
|
Average amount billed (₹) per customer
|
|
Week 1
|
120
|
18,000
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150
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|
Week 2
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60
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12,300
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205
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Week 3
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70
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146
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Week 4
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80
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Week 5
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90
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21,600
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240
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Total
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420
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