Tutor profile: Vishal N.
Subject: Numerical Analysis
A company is deciding what price to sell its new product in the market. It has the following details. Plan 1 Plan 2 Cost/Unit $ = 7 7 Selling Price/Unit $ = 10 8 Units Sales (Forecast) = 20 35 If the company wants to maximise its profits then which plan should it adopt?
The company should adopt Plan 1 because it maximises the profits. Plan 1 Plan 2 Total Cost = 140 245 Sales $ = 200 280 Profit = 60 35 Total Cost = Cost/Unit $ x Units Sold (Forecast) Sales $ = Selling Price/Unit $ x Units Sold (Forecast) Profit = Sales $ - Total Cost or Profit = (Selling Price/Unit $ - Cost/Unit $) x Units Sold (Forecast)
Is there a difference between advertising and promotion?
Yes, both advertising and promotion are different terminologies. Advertising is a subset of Promotion. Promotion is a broader term which includes advertising, sales promotion, direct selling, exhibitions and trade shows.
Imagine that you are driving on a road that has speed-breakers and your vehicle can cross the speed-breaker if the speed-breaker is 1.5 feet high and 1 foot wide else the vehicle will sustain serious damage. If someone tells you that there are 5 speed-breakers that are exactly 1 foot wide, but their average height is 1.3 feet. In such a scenario would you drive on the road or look for another road to drive on? (You don't want your vehicle to sustain any damages).
You should probably look for another road to drive on because the average height can be calculated as: Height (ft) Speed-breaker #1 = 2.5 Speed-breaker #2 = 1 Speed-breaker #3 = 1 Speed-breaker #4 = 1 Speed-breaker #5 = 1 Average = (2.5+1+1+1+1)/5 = 1.3 or Height Speed-breaker #1 = 1.3 Speed-breaker #2 = 1.3 Speed-breaker #3 = 1.3 Speed-breaker #4 = 1.3 Speed-breaker #5 = 1.3 Average = (1.3+1.3+1.3+1.3+1.3)/5 = 1.3 Hence there is a chance that the height of the speed-breaker maybe more than 1 foot high which means that there is a probability that your vehicle may get damaged while crossing the speed-breaker.
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