At Ronald's fast food business for five years the French fries are its most popular product. During the past year, its profits have suffered because the farm that supplies it with potatoes has increased its prices drastically. What should Ronald's do to control its production costs?

Question

Business

Zoey Avery

2 May, 20:57

At Ronald's fast food business for five years the French fries are its most popular product. During the past year, its profits have suffered because the farm that supplies it with potatoes has increased its prices drastically. What should Ronald's do to control its production costs?

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Answers (1)

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Dillon Harris · Answer 1

Ronald should buy the farm and become owner

Explanation:

Ronald's french fries are quite famous but he is suffering losses as the supplier to supplies main raw material, potato has increased the prices, thereby increasing Ronald's production cost.

Since potato is the main raw material used in making french fries, its prices has a considerable effect on the overall cost and revenue. This is an ingredient that he cannot avoid as well. The only alternative he has to reduce his production cost is to buy potato farm as even though it is a heavy investment, it will yield him long term benefits.