Polo Golf Shirt Pricing 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 discounted price to be offered at the 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 variables cost information is collected on the following spreadsheet: Quantity Price Total Rev Marginal Rev Variable Cost 0 $50 $0 $0 $28 1 $48 $48 $48 $28 2 $46 $92 $44 $28 3 $45 $135 $43 $28 4 $44 $176 $41 $28 5 $42 $210 $34 $28 6 $40 $240 $30 $28 7 $38.31 $268 $28 $28 8 $36.50 $292 $24 $28 9 $34.50 $311 $19 $28 10 $16 $28 11 $13 $28 12 $10 $28 13 $7 $28 14 $4 $28 15 $0 $28 16 -$1 $28 17 -$4 $28 18 -$7 $28 QUESTIONS Would you recommended lowering price to the level required to generate 15 per day? Why or why not? What does it mean to “sell at a negative margin”? At the 14 shirts per day, the margin is positive. But what is the operating profit or loss on the 14th, 12th, and 10th? How many shirts do you recommend selling per color per day? What then is your recommended dollar markup and the markup percentage? What dollar margin and percentage margin is that?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Polo Golf Shirt Pricing
The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A
|
Quantity |
Price |
Total Rev |
Marginal Rev |
Variable Cost |
|
0 |
$50 |
$0 |
$0 |
$28 |
|
1 |
$48 |
$48 |
$48 |
$28 |
|
2 |
$46 |
$92 |
$44 |
$28 |
|
3 |
$45 |
$135 |
$43 |
$28 |
|
4 |
$44 |
$176 |
$41 |
$28 |
|
5 |
$42 |
$210 |
$34 |
$28 |
|
6 |
$40 |
$240 |
$30 |
$28 |
|
7 |
$38.31 |
$268 |
$28 |
$28 |
|
8 |
$36.50 |
$292 |
$24 |
$28 |
|
9 |
$34.50 |
$311 |
$19 |
$28 |
|
10 |
|
|
$16 |
$28 |
|
11 |
|
|
$13 |
$28 |
|
12 |
|
|
$10 |
$28 |
|
13 |
|
|
$7 |
$28 |
|
14 |
|
|
$4 |
$28 |
|
15 |
|
|
$0 |
$28 |
|
16 |
|
|
-$1 |
$28 |
|
17 |
|
|
-$4 |
$28 |
|
18 |
|
|
-$7 |
$28 |
QUESTIONS
- Would you recommended lowering price to the level required to generate 15 per day? Why or why not? What does it mean to “sell at a negative margin”?
- At the 14 shirts per day, the margin is positive. But what is the operating profit or loss on the 14th, 12th, and 10th?
- How many shirts do you recommend selling per color per day? What then is your recommended dollar markup and the markup percentage? What dollar margin and percentage margin is that?
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