Product K was introduced to the market some time ago and is now about to enter the maturity stage of its life cycle. The maturity stage is expected to last for ten weeks. Each unit has a variable cost of $38 and takes one standard hour to produce. The Managing Director is unsure which of four possible prices the company should charge during the next ten weeks. The following table shows the results of some market research into the level of weekly demand at alternative prices: Selling price per unit ($) 100 85 80 75 Weekly demand (units) 600 800 1,200 1,400 REQUIRED Which one of the four selling prices should be charged for Product K in order to maximize its contribution during its maturity stage?

Product K was introduced to the market some time ago and is now about to enter the maturity stage of its life cycle. The maturity stage is expected to last for ten weeks. Each unit has a variable cost of $38 and takes one standard hour to produce. The Managing Director is unsure which of four possible prices the company should charge during the next ten weeks. The following table shows the results of some market research into the level of weekly demand at alternative prices: Selling price per unit ($) 100 85 80 75 Weekly demand (units) 600 800 1,200 1,400 REQUIRED Which one of the four selling prices should be charged for Product K in order to maximize its contribution during its maturity stage?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter8: Evolutionary Solver: An Alternative Optimization Procedure

Section: Chapter Questions

Problem 35P

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