A decision in which a manager needs to determine whether a product line (or segment) should continue or be eliminated is what kind of decision?

Question

Business

Roy

30 June, 02:38

A decision in which a manager needs to determine whether a product line (or segment) should continue or be eliminated is what kind of decision?

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Answers (1)

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Rayne Anthony · Answer 1

Keep-or-drop decision

Explanation:

Keep-or-drop decision is taken when a manager is in a dilemma whether to continue a product line or segment or shut it down. The manager needs to analyse income statement related to the product line to understand the major issue with product line. If costs are more than revenue, then the product line needs to be shut down. If the reasons for incurring losses can be addressed and that revenue from the product line is more, then it is not dropped.

Therefore, manager takes a keep-or-drop decision.