The setting is a
Ralph Lauren outlet store, and the product line is Polo golf shirts. A product
manager and the General Manager for Outlet Sales are analyzing the discount to
be offered at the outlet stores. Let’s work through the decision at the level
of one color of golf shirts sold per outlet store per day. The decision being
made is how low a price to select at the start of any given day to generate
sales at that price throughout the day. The demand, revenue, and variable cost
information is collected on the following spreadsheet:
1. Identify the
change in total revenue (the marginal revenue) from the fourth shirt per day.
What price reduction was necessary to sell four rather than three shirts?
2. What is the change
in total revenue from lowering the price to sell seven rather than six shirts
in each color each day?
3. Break out the
components of the $28 marginal revenue from the seventh unit sale at
$38.31—that is, how much revenue is lost per unit sale relative to the price
that would “move” six shirts per color per day?
4. Calculate the
total revenue for selling 10–16 shirts per day. Calculate the reduced prices
necessary to achieve each of these sales rates.
5. What number of
shirt unit sales most pleases a sales clerk with salescommission-based bonuses?
6. Would you
recommend lowering price to the level required to generate 15 unit sales per
day? Why or why not?
7. What is the
operating profit or loss on the fifteenth shirt sold per color per day? What
about the twelfth? The tenth?
8. How many shirts do
you recommend selling per color per day? What then is your recommended dollar
markup and markup percentage? What dollar margin and percentage margin is that?
Apa jawabannya pak Mustamin? ;)
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