suppose you work for an original equipment manufacturer (OEM) who makes componen

Question

suppose you work for an original equipment manufacturer (OEM) who makes component pieces for a telecommunication company. The telecom company asks you for a price quote for 2,000,000 units that will require a $1,000,000 investment with marginal costs of $1. What is your bottom line in negotiations with the telecom? Suppose you agree on a price slightly above your bottom line. Immediately after quoting this price to the telecom company, you receive a faxed order for one million units. What should you do?

Explanation / Answer

bottom line = $1,000,000 Immediately after quoting this price to the telecom company, you receive a faxed order for one million units. What should you do? Take into consideration the price and manufacturing costs for the one million units, and talk it over with the telecom company again to confirm the changes in price if any or the new policies that come into play. Hopefully this answered your question, best of luck.

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