Question

Identify and evaluate what additional information management need about existing and potential customers before finally accepting or rejecting the order.

Answer 1

Additional information the management will need about existing and potential customer before acceptance or rejecting the offer are as follows-

A. Management will be considering several fixed cost associated with acceptance of the order and it will be looking after whether the acceptance of order will be increasing fixed cost or not.

B. Management will also be looking upon various qualitative characteristics like relationship management and past relationship with these consumers.

C. Management will also be looking the overall capacity that will be required by the management to fulfill the order and the capacity which is available to the management to fulfill the order.

D. Management will also be looking the pricing policy and the price which are being offered by the customer whether they will be good enough to deal with production of product or not.

E. They will also be considering the risk of losing other business if the project has been rejected so there will be over all taking up on opportunity cost regarding acceptance and rejection of the product from a customer.