Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $800 per gram plus $30 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $820 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells. P(x) = Calculate how much perfume should pass through his hands per day in order that he break even.
Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $800 per gram plus $30 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $820 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells. P(x) = Calculate how much perfume should pass through his hands per day in order that he break even.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $800 per gram plus $30 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $820 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.
P(x) =
Calculate how much perfume should pass through his hands per day in order that he break even.
g:
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