Costs & Values

San Juan Cell Phones
Marianela Tavárez Torres
University of Phoenix
ECO/561 Puerto Rico – Economics
Prof. Adelaida Torres Dilán  
October 20, 2010


In this scenario of San Juan Cell Phones we could appreciate the difference between three types of cell phones to be made their costs, values and price.   These phones need to be reliable to the customers and meet their spectators but need to be economic in production in other to fit the customer’s pocket.   We will find a way to get their production ready and keep it as profitability as possible in order to secured the 100,000 cell phone order.

Maria Perez a business development specialist at San Juan Cell Phones as accepted an order of 100,000 cell phones from a major chain and she wants to take the order to cover the company excess capacity coming up in the next three months. In order to proceed with this order she needs to verify their production costs in order to know the best suitable price for the major chain (Big Box) and her company.   When we speak about production we are talking about inputs to outputs, also we need to consider the technology available for using equipment, plant, materials, labor, etc...   Any improvements made to better their equipment in technology will result in a new production function.   First of all we need to consider the accurate cost of the product and carefully take in consideration what is done and what is not done, and then been careful in the decision that will be made because of their benefits and relative cost.   In this case San Juan Cell Phones need to visualize their current cost for the Alpha model.   See if there is any already in stock according to the reading they have an excess in capacity of 70,000 cell phones units over for the next three months in which only 30,000 will be need it in order to complete the order.   If there were to decide to use the Alpha unit prototype and complete the order with that model they will incurred in something call...