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MARKETING PROBLEMS Set 2
The exercises below are intended to provide practice in the
typical
arithmetic challenges faced by marketers. Accordingly, please
focus onthe numerical analysis reuired, disregarding the shortage
of otherinformation that one would wish before making !nal
decisions.
EXERCISE 1
A ballpoint pen manufacturer had the following information"
#lastic tubes" top and tip .$% per unit&nk .'( per
unit)irect *abor .'( per unitSelling #rice .+' per unitAdvertising
-','''anagerial and secretarial salaries 2'','''Salespeople/s
commissions 0actory $' per cent of sellingpriceoverhead $2','''
Total available ballpoint pen market is $' million pens 1near
this sellingprice.
3alculate"a. unit contributionb. break4even volume in unitsc.
share of total market to break evend. total pro!t for the company
if three million pens are solde. volume in units reuired to
generate %'',''' pro!t.
EXERCISE 2
5ones Toy Store sells toys purchased from a wholesaler who buys
themfrom a manufacturer. The wholesaler gets a 2% per cent margin
on itsselling price and 5ones gets (% per cent markup on cost.
&f themanufacturer sells a toy for %, what is 5ones/ selling
price toconsumers6
7.$$2%http"88en.wikipedia.org8wiki8arkup91business
EXERCISE 3
*eaven/s :ox ; *abel is evaluating the feasibility of
manufacturing anew product. The plant it owns has a capacity to
produce one millionunits of the product. 0ixed costs associated
with this product are2,''',''' and the maximum selling price that
the market will tolerate
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2'',''' units, calculate the manufacturer/s pro!t, the
wholesaler/smargin, and the retailer/s margin.
EXERCISE 9
5oe needed a Dob to at least cover his university tuition next
year. AcmeEacuum 3ompany would hire him to sell its vacuum cleaners
on a door4to4door basis. The company estimated that 5oe/s variable
cost per sale1which included paying Acme for the vacuums would
amount toapproximately ' per cent of the selling price of the
cleaners. 5oe/s!xed costs for the summer 1including his apartment
rent and spendingmoney would amount to 2,%''. 5oe !gured that he
needed +,%'' tocover tuition next year. Acme estimated that a keen
salesperson couldsell $%,''' at retail of vacuum cleaners in a
four4month period. 5oeknew that he could return instead to his old
summer Dob in a factory.Although his salary would be assured at
this factory Dob, 5oe
understood he would be able to save only (,%'' for his
schooling.Bhich Dob should 5oe take6 Bhat factors did you consider
when makingyour decision6
EXERCISE 10
A children/s puFFle costs (.%' to manufacture. anufacturer
marginsare (' per cent, wholesaler margins $% per cent and retailer
margins%' per cent 1all calculated as a percentage of their
respective sellingprices. Bhat price would this mean for consumers
in the stores6
