1-Make a table that shows the following (use Excel):
-previous price points and the two proposed price points.
-Cost per unit for each price point
-Unit sales corresponding to each price
-Gross profit corresponding to each price
2-What other factors should Courtney’s consider?
3-What is your recommendation for the price? Support your answer with clear rationale and assumptions for your calculations. A recommendation without any calculations will not receive any credit. . (you may use a combination of prices or a different price from those discussed in the case; try to show an optimistic scenario and a pessimistic scenario) –
**please show th Exel steps **
-Make a table that shows the following (use Excel):
-previous price points and the two proposed price points.
-Cost per unit for each price point
-Unit sales corresponding to each price
-Gross profit corresponding to each price
Answer :
| Retail Price from the manufacture |
Courteny’s Price | Pieces | Profit for each product |
Profit As a whole |
| 4.5 | 7.5 | 300 | 5 | 1500 |
| 5 | 9.95(10) | 600 | 4.95 | 2790 |
| 5.5 | 12.5 | 480 | 7 | 3360 |
| 5.5 | 9.95 | 1000 | 4.95 | 4450 |
| 5.5 | 11.25 | 900 | 5.75 | 5175 |
2-What other factors should Courtney’s consider?
Notice that the first four was stated in the information given from the background of the study while the last added below is the recommended price because we have concluded that if Courtney’s decide on going between the 12.50 ( which is too high ) and 9.50 ( which is risky) while cutting its pieces from 480 ( which wont satisfy the customers based on last year experience ) and 1000 ( which might be too many since the price have raised ). The recommended price isn’t that much pricey to the point that the customers will not buy anymore plus it would also help the store gain profit in a way that there is no risk taken both in the business and the satisfaction of customers
A)
Instead of going for $10 or $12.50, The store can sell the product of 600 pieces for $11.25 which is in between their choices while considering that the mixture cost is still 5.50, the markup should be 5.75 which isn’t risky for the business, and the total profit would cost around $3450
B)
An attempt to find another supplier isn’t a bad idea if the original one keeps on raising its retail price which would not help the progress of the business though Courtney’s should find one who can offer almost the same quality with a lower price despite knowing that the loyal customers might notice the slight changes and difference that will make them contemplate more before buying again.
c) Selling it on the desired price of $12.50 but in the way of having a discount in time for Christmas season, for example: 12.50 per bag but if you buy 2 more bags, you’ll get 50% off on the third which will cost $31.25 in contrast of paying $37.5 in total regular price.
3) What is your recommendation for the price? Support your answer with clear rationale and assumptions for your calculations. A recommendation without any calculations will not receive any credit
Answer
Caused by the changes of the price from the manufacturer, Courtney’s pricing has been complicated in terms of having to consider not only the price but also the factors of profitability, potential customers, and in store expenses together with taxes and others
Therefore the group concluded a chart the includes the retail price changes of the manufacturer and its estimated profit that will serve as a guide for the problem
