X Ltd imports and distributes kiddies toys. It most popular item is the Barbie Doll. This costs Rs. 120 with the manufacturer and a further Rs. 30.00 is incurred for customs duty and clearing charges per unit. The toys are sold to retailers at Rs. 200.00 per unit. Currently, they order 35,000 units per month which is sufficient to cater to the local demand. The supplier in China has offered a discount of 10% on his price, if X Ltd buys 50,000 or more units. X Ltd believes that if an attractive discount can be given to retailers, they will increase the quantity purchased. What is the minimum price X Ltd needs to sell to retailers to increase sales volume while NOT reducing the profit margin.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Class Exercise 03
X Ltd imports and distributes kiddies toys. It most popular item is the Barbie Doll.
This costs Rs. 120 with the manufacturer and a further Rs. 30.00 is incurred for
customs duty and clearing charges per unit. The toys are sold to retailers at Rs.
200.00 per unit.
Currently, they order 35,000 units per month which is sufficient to cater to the local
demand.
The supplier in China has offered a discount of 10% on his price, if X Ltd buys
50,000 or more units. X Ltd believes that if an attractive discount can be given to
retailers, they will increase the quantity purchased.
What is the minimum price X Ltd needs to sell to retailers to increase sales volume
while NOT reducing the profit margin.
Transcribed Image Text:Class Exercise 03 X Ltd imports and distributes kiddies toys. It most popular item is the Barbie Doll. This costs Rs. 120 with the manufacturer and a further Rs. 30.00 is incurred for customs duty and clearing charges per unit. The toys are sold to retailers at Rs. 200.00 per unit. Currently, they order 35,000 units per month which is sufficient to cater to the local demand. The supplier in China has offered a discount of 10% on his price, if X Ltd buys 50,000 or more units. X Ltd believes that if an attractive discount can be given to retailers, they will increase the quantity purchased. What is the minimum price X Ltd needs to sell to retailers to increase sales volume while NOT reducing the profit margin.
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