Discussion Assignment | Essay Help Services
Discussion Set
- You are serving as the chair for your community’s annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness. As the chair, you set a financial goal to break even on the one and only cost of the event, a fitness bag with the community seal and the event motto, “I AM ON THE RIGHT TRACK!”
The cost of the bags, which must be ordered in batches of 100, are: (complete marginal cost, below).
| Bags | Fixed Cost | Variable Cost | Total Cost | Marginal Cost |
| 0 | $1,700 | $ – | $1,700 | |
| 100 | $1,700 | $500 | $2,200 | |
| 200 | $1,700 | $1,200 | $2,900 | |
| 300 | $1,700 | $2,700 | $4,400 | |
| 400 | $1,700 | $5,200 | $6,900 | |
| 500 | $1,700 | $9,000 | $10,700 | |
| 600 | $1,700 | $15,000 | $16,700 | |
| 700 | $1,700 | $23,800 | $25,500 | |
| 800 | $1,700 | $36,800 | $38,500 | |
| 900 | $1,700 | $55,800 | $57,500 | |
| 1,000 | $1,700 | $83,000 | $84,700 |
Select any or all viable approaches below:
| ______Use the profit-maximizing rule, MR ≥ MC, buy 300 bags. |
| ______Use the profit-maximizing rule, MR ≥ MC, buy 200 bags. |
| ______Use Qb = F/ (MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. |
| ______Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200. |
- Your marketing department just undertook a major advertising campaign promoting the quality of your Best Brand Bike Shorts—BBB Shorts. They have provided you with an estimate of the success of the campaign stating: “the price elasticity of demand has decreased from -5.76 to -3.76.”
Before the campaign, your price was $240 per pair of BBB Shorts. What should the new price be? (Show how you obtained answer).
- You help couples book their perfect honeymoon. You currently offer plans for a cruise and for a casino stay.
Your sales manager is getting her MBA and has suggested you might consider bundling as a way to boost profits.
The table below shows the customer preferences. Your costs are $100 for the first booking and $50 for each additional booking.
“We Book Your Honeymoon Tour”
| Cruise | Casino | |
| Customer 1 | $7,000 | $3,000 |
| Customer 2 | $2,000 | $6,000 |
Given the preferences, would bundling improve profits over the high-cost strategy? Support conclusion by showing if (by how) profits differ under each strategy.
- Follow up (note that the dollar amounts have not changed from the previous scenario.)
You help couples book their perfect honeymoon. You currently offer plans for a cruise and for a casino stay.
Your sales manager is getting her MBA and has suggested you might consider bundling as a way to boost profits.
The table below shows the customer preferences. Your costs are $100 for the first booking and $50 for each additional booking.
“We Book Your Honeymoon Tour”
| Cruise | Casino | |
| Customer 1 | $7,000 | $3,000 |
| Customer 2 | $2,000 | $6,000 |
You know that about 21% of your customers decline cruises because of seasickness. At least 12% decline the casino trip saying they do not believe in gambling. As a rough approximation, you estimate that approximately 33% of your customers will never bundle. Given the preferences distribution, will mixed bundling increase profits? Show the calculations that support your conclusion.
