Breakeven & Business

Certain elements of business show that to achieve high gainfulness a dampen and diverse product mix will result in more capacity utilization. Therefore capacity utilization has a direct relation to receiptsability and product mix. This is because if capacity is fully utilized will the profit be reaching to the maximum as fixed costs will remain the same.However if the profit is to be further increased it is necessary to enhance the capacity as a result more capacity would need to be used to number one cover the fixed costs of the new capacity installed. Similarly in one machine, a number of products can be made therefore not all products will be made to the fullest as one product or the other production will be scarified. What companies try to achieve is the honest product mix so that optimal profitability is achieved and therefore make the business more versatile.Though it is the decision of the person in charge to decide each to fully utilize the capacity using the most profi table product or make a number of products to focus on product diverseness rather than on profitability. (Source Reliance Industries Limited, High Density Polyethylene Pipes Beyond water system Supply)References 1. Ms Poorvi C. Desai Polymers, Reliance Industries Limited, High Density Polyethylene Pipes Beyond Water Supply. Retrieved on October 5, 2008, from http//www. polymerupdate. com/poorvidesai/pdf/HDPE_Pipes. pdf