The units of production of Adam to reach the full potential of the segment next year depends on its share of the market segment and the total potential market demand.
For instance, if the share of the market segment owned by Adam is 60% with total potential market demand of 20,000 units, the production units should be 12,000 units (20,000 x 60%).
The market share refers to the percentage of an industry or a market's total sales earned by each participating company or brand over the past period.
The market share can be calculated as follows:
Market share = Adam's sales/Total market sales x 100
The market share last year = 60% (6,000/10,000 x 100)
Because sales of Adam = 6,000
And market demand = 10,000
Thus, based on the company's or Adam's market share and the total potential market demand for the coming year, the production unit of Adam can be computed as 12,000 units.
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