Question

Your Competitive Intelligence team is predicting that the Chester Company will invest in adding capacity to their Cell product this year. Assume Chester's product Cell invests in increasing its capacity by 10% this year. Because of this new information, your company anticipates all other products in the Core segment will increase their capacity by the same amount. How much can the industry produce in the Core segment the next year? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000). Select: 1Save Answer 13,728 5,040 8,359 7,381 4,219 9,559 8,581

Answer 1

Question Completion:

Figures in thousands (000):

Product Segment    Capacity Next Round

Dug             Core                1200

Dune     Core                1450

Beetle     Core                1040

Bat             Core                1050

New     Core                100

Adam     Core               1200

Answer:

Chester Company

Competitive Intelligence Report:

Based on the increased 10% capacity, the industry can produce 6,644 units.

Explanation:

a) Data and Calculations:

Product Segment    Capacity Next Round    Increased Capacity (1.1)

Dug             Core                1,200                    1,320

Dune     Core                1,450                    1,595

Beetle     Core                1,040                     1,144

Bat             Core                1,050                    1,155

New     Core                   100                        110

Adam     Core               1,200                    1,320

Total                                     6,040                   6,644

b) Each of the core segment products can be increased by the increased capacity factor of 1.10 (1 + i), where "i" is the rate of capacity increase.  Alternatively, the total capacity in the current period can be increased by the increased capacity factor.  Either way, produces the same result of an increased capacity of 6,644 units that the industry can produce.  The result also shows that the options provided in the question are not correct.  They must have been based on other assumptions.