Submitted by GR8TECH on January 10, 2008

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East West Analysis

East-West Transportation Analysis

The simulation of the East-West transportation company first scenario is to make a decision whether to stay in the Consumer Goods Division. The senior staff is split between closing down the division and continuing by decreasing output. By reviewing the Average Total Cost, Marginal Cist and Average Variable Cost graph, the decision is made to reduce output and maximized profit. Since Profit = Marginal Revenue, (P=MR), the output was reduced to where Profit=Marginal Revenue=Marginal Cost (P=MR=MC). The given price at this juncture is $55 per hundred weight or 6.75 million hundred weight shipments. The division is able to cover variable...

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