Reference no: EM132741244

A small firm is looking at various solutions to remain competitive

and profitable. Current financials for the firm are shown in the table below. In the first option, marketing will increase sales by 50%. There is also an OM option, which would reduce production costs 25%. Which of the two options would you recommend to the firm if it can only pursue one option? 

Business Function         Current Value

Cost of Inputs                         $50,000

Production Costs                    $25,000

Revenue                                  $80,000

OM option because it increases the profit by $5000

OM option because it increases the profit by $2500

Marketing option because it increases the profit by $6250

OM option because it increases the profit by $6250

Marketing option because it increases the profit by $2500