Business, 05.07.2020 17:01 majj979

The Auto Company of America (ACA) produces six types of vehicles; which includes four styles of cars: subcompacts, compact, intermediate, and luxury; as well as trucks and vans. Vendor capacities limit total production capacity to, at most, 1.2 million vehicles per year. Subcompacts and compacts are built together in a facility with a total annual capacity of 620,000 cars. Intermediate and luxury cars are produced in another facility with a capacity of 400,000; and the truck/van facility has a capacity of 275,000. ACAâs marketing strategy requires that subcompacts and compacts must constitute at least half of the product mix for the four car types. The Corporate Average Fuel Economy (CAFE) standards require an average fleet fuel economy of at least 27 MPG. Profit margins, market potential, and fuel efficiencies are summarized below. Profit Margin ($/vehicle)

Market Potential
(sales in â000)

Fuel Economy
(MPG)

Subcompact15060040
Compact22540034
Intermediate25030015
Luxury50022512
Truck40032520
Van20010025
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The Auto Company of America (ACA) produces six types of vehicles; which includes four styles of cars...

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