Essay Writer » Essay Blog » Business Essays Help » Price Quotes/ MIDAS

Price Quotes/ MIDAS

1.Jessica Alba, a famous actress, starts the baby and family products business, The Honest Company, with Christopher Gavigan. Alba and Gavigan set up their site so families can choose what kinds of non-toxic, all-natural products they’d like to use and get them in a bundle. Families can choose all kinds of products from food to hygiene necessities and cleaning supplies. Suppose they are thinking of expanding their business into five domestic markets: Phoenix, Dallas, Chicago, New York, and Atlanta. Assume their primary goal of business is to maximize economic profits, although they want to do business honestly.

Show all your calculations and process. Describe your answer for each question in three- to five-complete sentences.

  1. You are a business adviser for Alba and Gavigan. Describe a skimming price and a penetration price, and advise them whether they should charge a skimming price or a penetration price, with supportive reasoning for and against each pricing alternative.
  2. Are they likely to make economic profits initially? Can they continue to make economic profits in the long term? Why or why not? Discuss.
  3. What advice would you give to Alba and Gavigan to help them make more profit in the long term?

Problem 2:

You operate your own small building company and have decided to bid on a government contract to build a pedestrian walkway in a national park during the coming winter. The walkway is to be of standard government design and should involve no unexpected costs. Your present capacity utilization rate is moderate and allows sufficient scope to understand this contract, if you win it. You calculate your incremental costs to be $268,000 and your fully allocated costs to be $440,000. Your usual practice is to add between 60% and 80% to your incremental costs, depending on capacity utilization rate and other factors. You expect three other firms to also bid on this contract, and you have assembled the following competitor intelligence about those companies.

IssueRival ARival BRival C
Capacity UtilizationAt full capacityModerateVery low
Goodwill ConsiderationsVery concernedModerately concernedNot concerned
Production FacilitiesSmall and inefficient plantMedium sized and efficient plantLarge and very efficient plant
Previous Bidding PatternIncremental cost plus 35-50%Full cost plus 8-12%Full cost plus 10-15%
Cost StructureIncremental costs exceed yours by about 10%Similar cost structure to yoursIncremental costs 20% lower but full costs are similar to yours
Aesthetic FactorsDoes not like winter jobs or dirty jobsDoes not like messy or inconvenient jobsLikes projects where it can show its creativity
Political FactorsDecision maker is a relative of the buyerDecision maker is seeking a new jobDecision maker is looking for a promotion

 

Show all of your calculations and processes. Describe your answers in three- to five-complete sentences.

  1. What price would you bid if you must win the project?
  2. What price would you bid if you want to maximize the expected value of the contribution from this contract?
  3. Defend your answers with discussion, making any assumptions you feel are reasonable and/or are supported by the information provided.

Carefully review the Grading Rubric (Links to an external site.)Links to an external site. for the criteria that will be used to evaluate your assignment.

2. Read the “Midas” case study in Chapter 2 of your text and respond to the guided response below in a three- to four-page paper in accordance with APA guidelines as outlined in the Ashford Writing Center. In this paper you must:

  • Discuss the anticipated impacts (both positive and negative) upon operating efficiencies, and recommend solutions to minimize the negative impacts.
  • Discuss whether or not operating practices should be changed to accommodate the tune-ups. Be sure to explain your reasoning.
  • Examine the reasons why input should be gathered from the shop owners.
  • Discuss the type of input that should be gathered.
  • Describe the processes and steps needed to launch this new program.

Your paper should be in paragraph form (avoid the use of bullet points) and supported with the concepts outlined in your text and additional scholarly sources.

Submit your three- to four-page paper (not including the title and reference pages). Your paper must be formatted according to APA style as outlined in the Writing Center and must cite at least three scholarly sources in addition to the textbook.

Last Updated on February 11, 2019

Don`t copy text!
Scroll to Top