General manager, must decide whether to add a touch of the compressor line, what price to charge, and that the volume of production. Analysis requires maximizing the contribution in a situation where one factor is limited. As such, it takes into account the opportunity costs and shadow prices, as well as fixed and variable costs, the analysis of the demand curve, and sunk costs. Also offers a discussion of the correct measurement, offering departmental profit and return on sales as candidates. "Hide
by Francis J. Aguilar Source: HBS Premier Case Collection 4 pages. Publication Date: Sep 04, 1990. Prod. #: 191053-PDF-ENG
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