Question

Small Group Discussion (Class will be divided into Groups of up to 5 students)

We have made the point that managers often attempt to maximize the contribution margin per unit of a particular resource that limits output capacity. The following are five familiar types of businesses:

1. Small medical or dental practice
2. Restaurants
3. Supermarket.
4. Builder of residential housing.
5. Auto dealer’s service department.

Instructions:

Within a group of students:

• Each student will be assigned one of the five familiar types of businesses

(MUST POST FIRST) Initial Post – As an employee, write an internal memo to your manager addressing the following:

• For each type of business, identify the factor that you believe is most likely to limit potential output capacity.
• Suggest several ways (other than raising prices) the business can maximize the contribution margin per unit of this limiting resource. (Hint: These businesses often do implement the types of strategies you are likely to suggest. Thus, your solution to this case may explain basic characteristics of businesses that you personally have observed.)

For your response post, you will be taking on the role of the manager and respond to your employee’s and another manager’s memo. For the employee memo, Inform the employee as to what specific managerial decisions, conclusions, and/or judgments can you make from the information provided in that memo. For the manager response, provide an alternative conclusion based on the information provided.

Posting to group 3. (Supermarket)

Answer 1