A coffee manufacturer wants more restaurant chains to serve

[BTGmoderatorDC]

A coffee manufacturer wants more restaurant chains to serve its brands of coffee. The manufacturer is considering a plan to offer its coffee to large chains at a significantly lower price, at least for a certain period. This lower price initially will reduce the manufacturer's profits, but they hope to get into enough nationwide restaurant chains that their volume increases significantly. Once they have a much higher volume, even a small increase in their price would have an enormous effect on their profits.

In evaluating the plan's chances of success, it would be most helpful to know which of the following?

A) Whether their discounted price is lower than the prices of the coffee manufacturers who currently provide coffee to these nationwide restaurant chains.
B) Whether the manufacturer will use the same shipping system as it has been using to ship coffee to restaurants across the country.
C) Whether the prices of some mixes of coffee will be discounted more than the prices of others.
D) Whether the coffee manufacturer will be able to cut costs associated with advertising to maintain a strong profit margin even with the lower prices.
E) Whether an alternate plan would allow the coffee manufacturer to take greater profits from the restaurant chains to which it currently provides coffee.



OA A

Source: Magoosh