Based on the information you used to create your schedule and curve, which product would you recommend the Shoe Hut focus on, and why? Provide details that support your answer.

The resources of the company can be fully utilized when they are on the PPF ( Production Possibility Curve). Additional goods cannot be produced without foregoing another product. For the study we can consider that in combination B 12 units of running shoes are produced and 2 units of hiking boots are produced.

If the hiking boots are foregone then 3 units of running shoes can be produced additionally. The maximum capacity for running shoes is 15 and that of hiking shoes is only 10. So the Shoe Hut should focus on producing running shoes insert.

chilljain33 chilljain33 · Answer 2 · 2021-12-23T07:27:30+01:00

The shoe hut should focus more on running shoes rather than hiking boots that are produced by Shoe Hut as it is clearly evident from the tabular and the graphic representation through charts given below.

The image with tabular representation should focus more on running shoes as it produces 5 additional units as compared to making just 10 pairs of boots with similar input costs.

The running shoes attract more sales as they are more required by the public and hiking boots are more the needs of people who go on treks that might also happens not more than once or twice a year.

Higher sales generate higher revenues for the business as running shoes can then be sold for low profit margins and are a part of fast moving finished inventories and are cheaply produced.

Hiking boots are a product of high margin as they will have to compensate with lower revenues as they are a slow inventory and a premium footwear not required by most people.

Hence, the Shoe Hut will produce more Running shoes as they will also attract more sales and will result in higher revenues despite of low profit margins.

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