The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let's work through the decision at the level of one color of golf shirts sold per outlet store per day. The decision being made is how low a price to select at the start of any given day to generate sales at that price throughout the day. The demand, revenue, and variable cost information is collected on the following spreadsheet: also margnal cost In your discussion post, address the following: 1) Identify the change in total revenue (the marginal revenue) from the fifth shirt per day. What price reduction was necessary to sell five rather than four shirts? 2) Suppose that the salespeople make a commission that is a flat percentage of total revenue. What price would they prefer? Explain your reasoning. 3)Suppose you were trying to maximize profits. How many shirts do you recommend selling per color per day and what price do you set to achieve that goal? What percentage markup over marginal cost is this unit sold for?
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The setting is a Ralph Lauren outlet store- and the product line is Po (1).docx
1. The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product
manager and the General Manager for Outlet Sales are analyzing the discounted price to be
offered at the outlet stores. Let's work through the decision at the level of one color of golf shirts
sold per outlet store per day. The decision being made is how low a price to select at the start of
any given day to generate sales at that price throughout the day. The demand, revenue, and
variable cost information is collected on the following spreadsheet: also margnal cost In your
discussion post, address the following: 1) Identify the change in total revenue (the marginal
revenue) from the fifth shirt per day. What price reduction was necessary to sell five rather than
four shirts? 2) Suppose that the salespeople make a commission that is a flat percentage of total
revenue. What price would they prefer? Explain your reasoning. 3)Suppose you were trying to
maximize profits. How many shirts do you recommend selling per color per day and what price
do you set to achieve that goal? What percentage markup over marginal cost is this unit sold for?
