What do you mean by production mix?
Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products. The four dimensions to a company’s product mix include width, length, depth and consistency.
What is production mix modification?
Product mix expansion is achieved by increasing the depth within a particular product line i.e. new brands or variants of existing brands are added to the product line and/or by increasing the number of product lines.
What is product mix and its importance?
Understanding the product mix of a company is essential to study and analyze its brand image. A company with more product width and depth is seen as more diversified. More diversification means less risk as the company lowers its dependence on one product or product line.
How do you calculate product mix?
What is Sales Mix?
- Subtract budgeted unit volume from actual unit volume and multiply by the standard contribution margin.
- Do the same for each of the products sold.
- Aggregate this information to arrive at the sales mix variance for the company.
What is contraction of product mix?
Contraction consists of dropping or eliminating one or more product lines or product items. Here, fat product lines are made thin. Some models or varieties, which are not profitable, are eliminated. This strategy results into more profits from fewer products.
What is the advantage of product mix?
The primary advantage of a product mix is to give the company more opportunities to reach customers. and broaden the current products, as seen at Small Business Marketing Plans. Many products in a product mix are related, so customers may feel an affinity for the brand and will purchase similar products.
What are the causes of product mix?
Product mix is expanded, contracted, or modified depending on following factors:
- Profitability: Every business unit tries to maximize its profits.
- Objectives and Policy of Company:
- Production Capacity:
- Demand:
- Production Costs:
- Government Rules and Restriction:
- Demand Fluctuation:
- Competition: