A 23,000 square foot warehouse was just constructed for $700,000. If the cost-capacity factor is 0.82 , what is the estimated cost to construct a 35,000 square foot warehouse? The estimated cost to construct a 35,000 square foot warehouse is $. (Round to the nearest dollar.)
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
A 23,000 square foot warehouse was just constructed for $700,000. If the cost-capacity factor is 0.82 , what is the estimated cost to construct a 35,000 square foot warehouse? The estimated cost to construct a 35,000 square foot warehouse is $. (Round to the nearest dollar.)
The cost to capacity method is used when an organization wants to expand its business and aims to do significant capital expenditure. Using this method helps to ascertain the cost of a new facility.
It is calculated as:
Here, C2 denotes the expected cost of the new facility
C1 denotes the cost of the existing facility
Q2 denotes the area of the expected new facility
Q1 denotes the area of current facility
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