The VP of Operations argued to cut prices by 20% on all paint products in order to be more price-competitive in the market. With an already low contribution margin of 35%, lowering our prices will only bring down profit margins. The President of the company explained that they would need to cut prices by 40% to become competitive with lower priced paints in the market. We don’t believe that Janmar could make up their loss in margin through increasing sales volume. The VP of Finance suggests that we continue on the same track and keep the current 35% contribution margin.
Cons: * It does not increase production to a required level when needed. * It may cause wear and tear of the old machine. BUYING A BALL MILL AND A MELANGEUR They can try to buy both ball mill and a melangeur to increase the production and the capacity. Pros: * It saves a lot of time * They can have a refurbished melangeur for $50,000 only. * They can meet their projected demand.
Yes, I do believe Julia would increase her profit if she borrowed money. The shadow price is $1.50 for each additional dollar she earns. The upper limit in the model that is given is $1,658.88. This means that Julia can borrow $158.88 from her friend, which gives her an extra profit of $238.32. (C) Evaluate the prospect of paying a friend $100/game to assist.
On the other hand, as a result of the new reef centre it’s likely the budgeted costs will increase as the cost of the project is huge. After an extensive review into their budgeted costs and predicted profits I think that they are not in a good enough financial position to take on this project. Customer numbers and profits are falling. One of the reasons why customer numbers are falling could be as a result of the economic crisis which is affecting customer’s ability to spend and therefore less people are going on days out. For this reason, it is unlikely that the £20m project will provide a sufficient return on investment.
Company A decided to lower the price of product qwerty to $5.00. This change resulted in 250 product qwerty being purchased the next week resulting in a revenue increase of $250.00. Demand more than doubled as price went down. This dramatic change tells us the demand is elastic. If in this example less than 200 units would have been purchased the revenue would have been less than the revenue before the price change signifying that while demand increased when price went down, it did not increase enough to take the demand category out of inelastic demand.
However in the long-run, this price raise is not enough to make people quit smoking so since cigarettes are a demerit good, it will have a negative effect on the environment and it will increase the number of health issues from second hand smoke, not to mention the high unemployment rate and less taxes for the government. Work Cited: BusinessDictionary.com. 2013. What is inelastic demand? definition and meaning.
The effect could diminish the potential profit from the human market, which is considered to be the company’s major market. My opinion is to hold the launch of Oxyglobin. First of all, although the market for the Oxyglobin is significant and the competition is relatively low, the little margin on the pricing of such product cannot bring the company sufficient revenue. The company is considering pricing the Oxyglobin at $80-$100 per unit due to the high price elasticity of the small animal market. After the 30% distribution commission for new products and physical distribution cost of $10-$15 per unit, the revenue per unit comes down to $41-$60.
RUNNING HEAD: OPERA MANAGEMENT PROPOSAL Opera Management Proposal 6-17-13 A. Analyze the financial and leadership strengths and weaknesses Utah Symphony (US) currently is stable financially but lacks extra revenue to fund future projects. One of the reasons this is happening is because lack of donations to art programs during a down economy. A merger will help increase revenue to pursue future projects. US has been generating more than revenue than the opera but I believe it a weakness for them because their always having less capital than the Opera at the end of the year. The Opera has been spending less on programs and has less capital compared to the Opera: However, the opera manages it money better than the US and it always has more capital at the end of the year according historical trends.
The work-discouraging substitution effect from Obamacare is clearly bad. For workers who rely on health insurance subsidies created by the law, Obamacare will reduce the marginal return to labor: That is, they'll get less after-tax income for working one more hour. This is because a higher income will mean a smaller health plan subsidy. The effective tax rate will vary based on individual circumstances. For workers who work only part of the year (and therefore can get a cheap subsidized plan during the part of the year they're unemployed) CBO pegs the typical tax rate at 15%.
If publishers stop selling the book they stop making money; if they are not making money than they are not happy. This is where the subsequent element of my proposal comes into play. If the publishers are worried about losing money due to the limitations put on the number of editions they put out per decade, then I propose that the publishing companies create a volume with only the new information. This volume should be purchased at a reasonable price in addition to the old