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Problem Definition

A major juice producer sells packaged fruit juice to retail outlets. Normally, the juice is packed and sold in 16-ounce carton containers, but recently the producer added a new machine that packages the juice in 32-ounce plastic containers. So he was selling both the 16-ounce & the 32-ounce products. This allowed the business to grow 18% per year, but as sales continued to rise, profits kept falling.

The producer hired us to figure out why profits are falling despite higher revenues.

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4.4k
Times solved
Beginner
Difficulty
Do you have questions on this case? Ask our community!

Exhibits