EcoThread (ET) is a small private limited company that produces school hoodies from recycled cotton. ET has been invited to supply a new range of customized hoodies for an international schools conference. The order could improve ET's brand image, but the conference organizers require reliable delivery and consistent quality.

ET estimates the following monthly figures for the new hoodie range:

• selling price: USD 40 per hoodie
• variable cost: USD 22 per hoodie
• additional fixed costs for equipment rental, design software and supervision: USD 27 000 per month
• forecast sales: 1800 hoodies per month

A new fabric supplier has offered recycled cotton at a lower price, reducing variable cost to USD 18 per hoodie. However, the supplier is new and ET's production manager is concerned about possible late deliveries and inconsistent fabric quality. The marketing manager believes that meeting the conference order could help ET win future contracts with schools.

NightGlow (NG) operates mobile charging lockers at music festivals. Customers pay a fixed price to store and charge a phone for one day. NG rents space from festival organizers and pays attendants to supervise the lockers.

For its usual festival package, NG charges USD 8 per locker use. Variable cost is USD 2 per locker use and fixed costs are USD 12 000 per festival. Assume that variable cost remains USD 2 per locker use after the price reduction and that only the selling price and fixed costs change. NG normally sells 2600 locker uses at a large festival.

A competing business has entered the market. NG's marketing manager wants to reduce the price to USD 6 per locker use to attract more customers. The operations manager argues that a lower price will increase the break-even quantity and may create long queues, damaging NG's reputation. To handle extra demand, NG would also need to rent more locker units, increasing fixed costs to USD 15 000 per festival. Market research suggests that sales could increase to 4000 locker uses, but this estimate is uncertain because customers may bring portable power banks instead.

AquaPod (AP) designs compact water-filter bottles for hikers and students. AP currently sells through its own website, but a national outdoor retailer has offered to stock a new premium version of the bottle. The retailer would give AP access to a larger market, but it requires high packaging standards, fast delivery and a lower wholesale price than AP normally charges.

AP's finance director has prepared the following forecast for the premium bottle if AP accepts the retailer's offer:

• wholesale selling price: USD 32 per bottle
• variable cost: USD 20 per bottle
• additional annual fixed costs for packaging design, warehouse space and retailer compliance: USD 96 000
• expected annual sales through the retailer: 10 500 bottles
• AP's annual target profit for the premium bottle: USD 45 000

The operations director believes AP could reduce the variable cost to USD 17 by changing to a cheaper filter component. However, the product development team warns that this may reduce filter life and could conflict with AP's positioning as a premium, sustainable brand. AP's founder is attracted by the retailer's offer but is concerned that AP may become dependent on one large customer.

RePlate Kitchen (RPK) - a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

RPK is a social enterprise that turns surplus food from supermarkets into affordable meal kits for low-income families. Any surplus is reinvested into free cooking classes and emergency food parcels. RPK is considering leasing an electric refrigerated van so that it can collect from more supermarkets and deliver to more neighbourhoods.

Resource 2 — Selected monthly financial information for RPK

Resource 3 — Social-media statistic

RPK has 32 000 followers on social media. In a recent online survey, 18% of respondents said they would pay at least USD 1.50 more for a lower-emission delivery service if the extra revenue supported food access.

Resource 4 — Quotation

The finance manager said: "The new van supports our mission, but if sales fall below 4 000 meal kits in a month, our cash position could become very difficult."

ClearWater Refill (CWR) - a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

CWR is a social enterprise that sells household water-filter kits and uses its surpluses to install free refill stations in schools and community centres. CWR wants to launch a new low-cost filter kit made from recycled materials. The directors must decide whether to accept a conditional grant from a health charity.

Resource 2 — Forecast financial information for the first year of the new filter kit

Resource 3 — Social-media statistic

CWR has 54 000 followers. A post about free refill stations in schools was shared 9 600 times, but only 3 200 followers clicked the link to register interest in buying the new filter kit.

Resource 4 — Quotation

The founder said: "A filter kit price above competitors may fund our mission, but our target customers are households trying to reduce spending on bottled water."

LoopLearn Devices (LLD) - a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

LLD refurbishes donated digital devices and sells them at low prices to students from low-income households. It also runs paid repair workshops for schools. LLD wants to reduce digital exclusion but has struggled with unpredictable donations of devices and changing repair costs.

Resource 2 — Forecast sales mix for the next year

Resource 3 — Social-media statistic

LLD has 74 000 followers. A campaign video about digital exclusion received 210 000 views, but the number of donated laptops fell by 12% last year because local companies upgraded devices less often.

Resource 4 — Quotation

The operations manager said: "A single break-even figure is useful for our board, but our sales mix changes whenever a school cancels a workshop or a batch of donated laptops is too damaged to repair."