Breakeven & Business

Certain elements of business show that to earn in high spirits profitability a better and diverse merchandise mix leave behind outgrowth in more capacity exercising. Therefore capacity utilization has a direct relation to profitability and product mix. This is because if capacity is in full utilized will the profit be reaching to the maximum as fixed costs will remain the same.However if the profit is to be march on increased it is necessary to enhance the capacity as a result more capacity would need to be used to first compass the fixed costs of the new capacity installed. Similarly in maven machine, a number of products can be made then 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 right product mix so that optimal profitability is achieved and therefore make the business more versatile.Though it is the decision of the person in pullulate to decide either to fully utilize the c apacity using the close profitable product or make a number of products to focalization on product diversity rather than on profitability. (Source Reliance Industries Limited, noble Density Polyethylene Pipes Beyond Water Supply)References 1. Ms Poorvi C. Desai Polymers, Reliance Industries Limited, last Density Polyethylene Pipes Beyond Water Supply. Retrieved on October 5, 2008, from http//www. polymerupdate. com/poorvidesai/pdf/HDPE_Pipes. pdf