Practical Management Science
5th Edition
ISBN: 9781305250901
Author: Wayne L. Winston, S. Christian Albright
Publisher: Cengage Learning
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Chapter 7.3, Problem 7P
Summary Introduction
To calculate: The optimal price in dollars and the optimal profit in pounds.
Non-linear programming (NLP):
Non-linear programming (NLP) is used in complex optimization problems where the objectives or constraints or sometimes both are non-linear functions of the decision variables. A model can be termed as non-linear for more than one reason.
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Because market and operating conditions are different in each target market
all consumers will react similarly to the firm's pricing strategy.
the choice of a pricing strategy is not specific to the target market.
prices need to be held constant because everything else is changing.
only horizontal price fixing should be used.
none of the above.
Implementing Price Strategy is the firm readiness to sell the product which would be effective if given an attractive price strategy listed below:
a. Customary pricing is when one price is maintained over an extended period of time. Normally the price of the product will not be easily changed. The entrepreneur must consider the price of the product which is affordable to the majority of buyers. ex. A 1-peso candy.
b. Variable pricing is when the price responds to cost fluctuations or differences in demand. The entrepreneur must consider the law of demand and supply. If there are sufficient supplies and few demands, the price will increase and vice versa.
c. One-price policy is when the price is charged to all customers buying the product or service under similar conditions. The entrepreneur will set one price for all products available for sale even though they differ in design.
d. Flexible pricing is based on the customer's ability to negotiate or buying power of the customer. The…
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1. WHAT PRICING STRATEGY CAN BE EMPLOYED BY THE MAJOR OIL
PRODUCING COUNTRIES AS A RESPONSE TO THE INCREASE IN
SHALE OIL SUPPLIES FROM CANADA AND PRIMARILY THE US?
JUSTIFY YOUR DECISION BY OFFERING SOLID RATIONALE IN
DEFENSE OF YOUR THOUGHTS.
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Chapter 7 Solutions
Practical Management Science
Ch. 7.3 - Prob. 1PCh. 7.3 - Prob. 2PCh. 7.3 - Pricing Decisions at Madison The Madison Company...Ch. 7.3 - Prob. 4PCh. 7.3 - Prob. 5PCh. 7.3 - Prob. 6PCh. 7.3 - Prob. 7PCh. 7.3 - Prob. 8PCh. 7.3 - Prob. 9PCh. 7.3 - Prob. 10P
Ch. 7.3 - Prob. 11PCh. 7.3 - Prob. 12PCh. 7.3 - Prob. 13PCh. 7.3 - PRICING SUITS AT SULLIVANS Sullivans is a retailer...Ch. 7.3 - Prob. 15PCh. 7.4 - Prob. 16PCh. 7.4 - Prob. 17PCh. 7.4 - Prob. 18PCh. 7.4 - Prob. 19PCh. 7.4 - Prob. 20PCh. 7.4 - Prob. 21PCh. 7.4 - Prob. 22PCh. 7.4 - Prob. 23PCh. 7.5 - Prob. 24PCh. 7.5 - Prob. 25PCh. 7.5 - Prob. 26PCh. 7.5 - Prob. 27PCh. 7.6 - Prob. 28PCh. 7.6 - Prob. 29PCh. 7.6 - Prob. 30PCh. 7.6 - Prob. 31PCh. 7.6 - The method for rating teams in Example 7.8 is...Ch. 7.7 - Prob. 35PCh. 7.7 - Prob. 36PCh. 7.7 - Prob. 37PCh. 7.7 - The stocks in Example 7.9 are all positively...Ch. 7.7 - Prob. 39PCh. 7.7 - Prob. 40PCh. 7.7 - Prob. 41PCh. 7.7 - Prob. 42PCh. 7.8 - Given the data in the file Stock Beta.xlsx,...Ch. 7.8 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Another way to derive a demand function is to...Ch. 7 - Prob. 48PCh. 7 - If a monopolist produces q units, she can charge...Ch. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53PCh. 7 - Prob. 54PCh. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - A beer company has divided Bloomington into two...Ch. 7 - Prob. 58PCh. 7 - Prob. 59PCh. 7 - Prob. 60PCh. 7 - Prob. 61PCh. 7 - Prob. 62PCh. 7 - Prob. 63PCh. 7 - Prob. 64PCh. 7 - Prob. 65PCh. 7 - Prob. 66PCh. 7 - Prob. 67PCh. 7 - Prob. 68PCh. 7 - Prob. 69PCh. 7 - Prob. 70PCh. 7 - Based on Grossman and Hart (1983). A salesperson...Ch. 7 - Prob. 73PCh. 7 - Prob. 74PCh. 7 - Prob. 75PCh. 7 - Prob. 76PCh. 7 - Prob. 77PCh. 7 - Prob. 78PCh. 7 - Prob. 79PCh. 7 - Prob. 80PCh. 7 - Prob. 81PCh. 7 - Prob. 82PCh. 7 - Prob. 83PCh. 7 - Prob. 84PCh. 7 - Prob. 85PCh. 7 - Prob. 86PCh. 7 - Prob. 1.1CCh. 7 - Prob. 1.2CCh. 7 - Prob. 1.3CCh. 7 - Prob. 1.4C
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- 15-8arrow_forwardPricing Q: What are different factors that should be considered by marketers before deciding price of the product? Q: How the total cost is determined/calculated by company for deciding price of the product? Q: What is breakeven point? How is it calculated? Q: How the net profit is calculated? Q: Consult your book and write the following procedures and formulas for calculating price? Cost Plus pricing Breakeven pricing Return on investment pricing Value based pricing Q: Write the methods for determining pricing of new products?arrow_forward2. A monopolist with zero cost, that is c(q) = 0, faces two consumers whose demand functions are given below. Q1 = 6-P Q2 = 12-2P (a) Suppose the monopolist cannot engage in any price discrimination. Find the firm's optimal pricing strategy. Caleulate the firm's Lerner index. (b) Now, assume that price discrimination is possible. Find the monopolist's optimal first degree price-discrimination strategy. (c) Find the monopolist's optimal second degree price-discrimination strategy. (d) Find the monopolist's optimal third degree price-discrimination strategy.arrow_forward
- The airline industry alters the price of its seats based on the type of seat, the number of seats remaining, and the amount of time before the flight departs. This is example of: Select one: a. Basing-point pricing b. Zone pricing c. Dynamic pricing d. FOB-origin pricing Which of the following statements is correct? Select one: a. If the prices of the product are below its costs, profits will boost. b. The pricing strategy suggesting value to the customer and profit to company should be followed. c. If customers perceive that the product is over-priced, they are keener to buy it. d. If customers perceive that a product’s price is lower than its value, they will not buy it.arrow_forwardBased on the scenario, how can you define the importance of the price of a product in attractingcustomers?arrow_forwardWhat other factors besides price should be considered before changing your purchasing procedures?arrow_forward
- Sherri told Liz that her firm will compete on setting prices because that's good business. Which statement best explains her position? a Sherri is talking about skimming. b) Sherri wants her company to have a loss-leader pricing strategy. )Sherri is talking about EDLP, or sustained discount pricing. If it works for Walmart and Costco, it can work for her. d) Sherri needs to learn that the goal of pricing strategy is to match the competition by any means necessary, and compete on other factors.arrow_forwardWhich of the following companies uses a direct marketing channel? Apple Blossoms, a company that sells its O cosmetics exclusively through Ray's Retail Store Fishhooks, a factory that manufactures O fishing equipment that it ships to hobby stores worldwide Holly Wreaths, a store that sells Christmas ornaments to customers via its online click- to-order catalogs Germfight, a factory that manufactures dental products that it distributes only to select department storesarrow_forwardi need the answer quicklyarrow_forward
- An expectation about the price of a given product is known as Group of answer choices quote. market price. reference price. pricing strategy.arrow_forwardPrice Discrimination at Twin Pines Mall You sell skateboards and bikes at Twin Pines Mall. You have two types of customers: Parents of small children, who may have some preference but will generally buy either a skateboard or a bike, and teenagers, who insist on being "cool" and buying a skateboard. You estimate that the demand by parents for bikes is Dpb(pB, pS) = 80 - pB + pS/2, where pB is the price you charge for bikes and ps is the price you charge for skateboards; the demand by parents for skateboards is given by Dps(pB, pS) = 80 - Ps + pB/2. Meanwhile, teenagers do not demand bikes at all but have a demand for skateboards given by Dt(pB, pS) = 80 - pS/4 The wholesale price (i.e., your cost) is $60 for a bike and is $40 for a skateboard. a) What prices will you charge for bikes and skateboards? Why is it optimal to charge the same price for skateboards that you do for bikes, even though bikes cost you more? b) Now suppose you can open a second store in the mall for $1000 and can…arrow_forwardDetermine the dual price of the x1 and x2. Use the formula I have attached together with the LP Model.arrow_forward
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