Gap Analysis : Quarters Analysis

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Quarters Analysis
Quarter One:
At the beginning, we started the first quarter without having a clear strategy in making decisions, since we did not have a wide variety of information and economical knowledge firm 6 started with a very bad performance. In quarter 0 all firms started with an equal balance, our team (firm 6) thought if we decrease the price from 75.11 to 74.11 we will be able to attract more customers as well as with increasing production from 4100 to 4700 we can gain more profit, we reduced our price from $75.11 to $74.11. Our assumption tend to be wrong as the demand in the market was higher than supply and increasing price would lead us to higher profit. We increased advertisement, product development, e-commerce,
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We decided to increase our price by two dollars and increase the production by 300 units.

For our second decision, learning from quarter 1, we increased our price but in the same time, we did not want to set our price higher than the best firm. The competition was started and we knew that if we have a higher price we will not be able to compete with the other firms. We increased the price from $74.11 to $78 and increased the advertisement, product development, e-commerce, process improvement and training.
With the plant size of 8 we were able to produce more production with less marginal cost. But to keep the production near to 50% we reduced our production to 4250 from 4700. Also, during the second quarter the GDP was still growing and the demand was shifting to the right, so we could increase our product. As our marginal cost was higher than marginal revenue so we decided to increase plant size by another 2 units to decrease the cost in next quarter.
In this quarter, our net profit increased by more than $10,000, but other firms took “gut” decision and their price was higher than firm 6 and their net profit was higher too. Our firm remained in the last position with a higher profit, and in this time, we started to find some patterns in best firms’ decisions.

The results of the second decision were not good. We were on the last place among other firms and had the lowest net profits. We had a supply shortage of 1023
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