One suggestion is that the company reposition its water as a premium product, justifying a higher price. If successful, the company believes that it could charge 20% more for its water than it does now. 1. What is the maximum sales loss (in % and units) that Healthy Spring could tolerate before a 20% price increase would fail to make a positive contribution to its profitability? The maximum sales loss would be 25% before they can tolerate before a 20% price increase, which amount to 1,500 bottles per day instead of 2,000.
Date: May 25, 2013 To: Lead Economist Laura From: Subject: GE273 Unit 8 Report for Researcher Molly Market researcher Molly needs to select the best advertising strategy for her client Fuse Soda Company. Fuse’s main rival is Frantic Soda, and Molly understands that the effectiveness of Fuse’s advertising depends on how Frantic reacts. If both companies choose to hire a celebrity spokesperson, neither market share, but both experience a 10% increase in profit because the celebrity promotes stronger sales. If only one company hires celebrity, that company enjoys improve market share (a 15% increase) and higher profit. The company that does not hire a celebrity loses market share and experiences a 20% decrease in profit.
This issue is in fact more of an opportunity and the opportunity is to reduce the variable cost associated with the consolidated shipments as the estimated growth in shipments from China and Taiwan is 15% per year. This growth rate implies the cost reduction in consolidated shipments which is 11% of total will be contributed to profit margin. Inferred from this issue of consolidated shipments is an issue of increased lead times which in supply chain is very crucial. So the issue is to reduce lead times incurred due to consolidation of small shipments so that supplier to Grainger delivery
Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
Research has shown that involving suppliers in the product development process can yield benefits such as improved product costing, faster product development time and more effective, efficient operations. Deere & company initiated the creation of the Skid-Steer machine, a 1000-3000 pound capacity versatile construction site machine, more than 25 years ago, but outsourced the product design and manufacturing to New Holland an independent contractor. The skid-steer loader is supposed to sell more than 60,000 units amounting to $1.2 billion by 2000-2001. Deere & Company plans to triple its market share and they want to take back design and manufacturing of the skid-steer loader from New Holland. Deere & Company wants to improve the design and manufacturing of the skid-steer loader with order winning criteria such as improved product features, product range, delivery and price.
Other arguments for the expansion include jobs and the increase in economy, for example the 3rd runway will boost the economy to a predicted 22 billion. The Construction alone will create 60,000 jobs in the area and once complete there will be 800 jobs available on site. Many local people are concerned that the increased air traffic will cause too much pollution but these concerns are often over played. The development will help to compete against other European airports, which
This suggest that for every $1 that the company earns in Sales, they paid 23.1 cents for their employee. The fact that Country Road has decreased the percentage means that they became more efficient in paying their employee over the years. (c) Judging from the Vertical Analysis, Country Road might have been opening new stores , thus increasing Occupancy Expense. By doing this they have to save more money, cutting cost which led to decrease in Employment Expense, cutting their employee’s wages. ??
Explain your answers. a. If a firm in the industry wishes to increase total sales revenue (ignoring cost considerations), will it raise or lower its selling price? Why? The selling price would only increase because the absolute value of -2.5 is 2.5 which are greater than 1 meaning it is elastic and an increase in price leads to a reduction in total revenue.
We cannot afford and will not be approved for extra advertising without research that proves that this advertising will increase revenues more than the cost. The option of raising discounts for the Skyline Buffet and gift shop is not being recommended because it increases our loss to the 20% discount. It will decrease our revenue from the gift shop and Skyline Buffet. This 5% increase has to be offset by a 5% or higher increase in spending through the current members or new members. Further research should be done to the members to see if this change would allow them to purchase more.
By looking at the trading, profit & loss forecast for the year, you can see that things look like they will go reasonably well over the year as it shows a net profit of £15808. You may need to consider the possibility of a rise in fuel prices or the possibility of a fuel shortage in the current climate. This could affect your business by raising the cost of sales. You should look at increasing your revenue figure in order to counteract this. Look at your pricing policy and make changes appropriately.