Profitlogic's Pricing Optimization

Tactical decisions regarding pricing activities are mostly the daily actions taken by Domestic Pricing and

I was pretty confident that our sales would justify the additional office and salary expense. However, as I looked at the pro forma statements it became very apparent that the sales force would sell more unit than the plant could produce. In hindsight, I should have increase production in Quarter 2 so I could keep up with future sales in Quarter 4. As a result, I did not hire new sales people but I fine tuned my advertising by copying my competitors and increased the advertising budget from $198,598 to $311,897. The pro forma income statement showed total revenues at $8,280,065 which was jump from $6,888,870. My operating profit also increased from $1,104,794 to $1,658,769. I was content with the slow but steady growth.

After a few months of detailed scrutiny of the numbers, we were able to make pricing decisions more quickly by using the breakeven change in volume to set the new price. Based on our broad

A. Explain what type of market structure is presented in the movie. Explain the types of strategies Joe Fox and Kathleen Kelly use to compete and maintain market power. Differentiate between pricing and non-pricing strategies (use Chapter 7 in Stengel’s textbook). You can expand and talk about potential strategies in the bookselling business even if they were not explicitly addressed in the movie.

There were multiple issues weighing heavily on the mind Wally, a VP at Sports Obermeyer, in November of 1992. Sports Obermeyer, a successful manufacturer of ski apparel was having trouble planning the manufacturing levels of its various skiwear items for 1993-94 based on whatever scant information it had on the end customers’ likes and dislikes. Waiting to make these decisions till after the Las Vegas trade show, the one event which would give reliable retailer feedback, would prove very costly given the extremely long lead times of it’s suppliers in Hong Kong and China. In the past, Sports Obermeyer had relied on a group of company managers, called the “buying committee” to make a consensus forecast on the demand of

The price ceiling is the maximum price a seller is allowed to charge for a product or service. An impact on society includes when the prices are so high of a product, that no one can buy it. A price floor is the lowest legal price a product or service can be sold at. When market price is at its lowest, it may still be too high for consumers to purchase products. Governments can intervene for any purpose, and they are the ones who set these price controls.

One of the best aspects of the way the time-driven ABC system was put into place at Kemps was how efficiently and accurately management determined the main issues with the current cost system and responded with appropriate and relevant solutions. For example, one of the greatest problems the company was facing was that many of its operating costs were spread out equally over a customer base that was growing more diverse and demanding more personalized and varied service, effectively cutting or potentially eliminating entirely Kemps’ profit margins for a product. Therefore,

Nutracuticals is an online direct-to-consumer supplier of dietary supplements for women. The company based in Miami, FL offers vitamin supplements from over 50 brand names/suppliers. This firm is currently breaking even, and the decisions made over the next three phases of the business, each three years spanning from 2013-2021, will dictate the firm’s profitability. The decisions will be based on financing options and resources (cash) available to the firm in each phase. Decision-making will be based on the impact to the business metrics involved including: sales, EBIT, net income (profit), free cash flow (FCF), and the total firm value. For the purpose managing inventories, growth, and adding value to the firm, as CEO I have chose to exercise theses three phase options, to follow.

The simulation had shown my ice cream store made a $1.6million revenue with a net profit of $465k. It does not seem very much net profits because of IceFlake’s operating expense in its programs and advertisements. During the operation, 10 employees were hired for IceFlake with a salary that is in the range of $7-9 dollars per hour. Payroll usually consist one of the highest expense in most industry, however the programs at lv10 costed more than the payroll. Furthermore, it is hard to determine rather how effective the programs are at different levels. Even through my market share is averaged at 20% against other 4 competitors, the advertisements provided an unknown amount of how many more customers can be attracted with. The brand recognition was high with customer satisfaction and employee morale at very pleased, but with decreased advertisements shown same number of customers each day. The simulation did not provide a more accurate data or a benchmarking to other competitors, it simply shown how much market share and their price. Therefore, the effectiveness of the programs and its advertisements was difficult to be determined.

A result of the discussion led to the discovery that a large percentage of quotes are considered useless. This finding will assist in the analysis of the Pricing Desk process.

Support: The inventory increase in 1997, YOY, was 58%. Additionally, the COGS to revenue ratio reduced from to 72% in 1997. This combination of increase in inventory and reduction in COGS as a percentage of revenue seems to indicate that the fixed costs may have been spread over a larger base through over production, thereby causing the COGS to reduce. This may be a cause for concern and could be a potential red flag.

By a brief review we can see next assumptions. - Gross sales are highly influenced by orders

When people argue with decision analysis and its achievements they usually mention the story of DuPont, an American chemical company. It managed to successfully integrate risk and decision analysis functions to both operational and strategic levels. The company claimed that Desciison and Risk Analysis not only brought tangible benefits to the company, but also intangible, such as increased attention and commitment to actions (Krumm et Roll, 1992).

tely or scale back usage without a significant negative penalty. Implicit in this type of offering is that users have an understanding of the value per use of the offering, but have either

Over the years, many of our managers and higher officials have had trouble making business decisions due to the way our P&Ls were structured. We faced several challenges when trying to negotiate with our customers because we were unable to show a cost break down which took into account every aspect of the production process. Although, there are some advantages with the traditional costing approach, such as it aligns with general cost accounting principles, ease of implementation in companies that provide a specific product, it had several drawbacks, such as: