Assume that the brand manager forecasts upcoming sales of SU

Assume that the brand manager forecasts upcoming sales of SUSI to be 150,000 units, and that there are 30,000 units of SUSI in inventory. Given this information, how many units of SUSI should the brand manager request be produced? Show your work.

The brand manager should require to produce 120000 units to meet the sales demand of 150000 units.

Required Production = Sales + Ending Inventory - Beginning Inventory

                                  = (150000 + 0 – 30000)

                                  = 120000 Units

Assume that the brand manager of Company U has specified a MSRP (manufacturer’s suggested retail price) for brand SUSI of $350. What will its actual selling price be in specialty, mass merchant, and online stores? Show your work

Specialty Stores

Mass Merchants

Online Stores

If it costs $125 per unit to produce SUSI, and the MSRP is $350, what is Company U’s per unit contribution margin in each of the three channels of distribution? Show your work. 3.5 points.

Specialty Stores

Mass Merchants

Online Stores

Solution

Actual selling price :

Mass merchants:

whole sale or Mass merchants = Cost of production X 2

Whole sale price = 125X2= 250$

Speciality stores : the pricing strategy used in speciality stores is competitive as same category of products are available in one store . we are assuming to keep a markup of 2.5 then the selling price to speciality stores is

Speciality stores = Cost of production X2.5

specilaity store selling price = 125X2.5= 312.5

Online stores: the pricing strategy for online stores should be kept competitive as there are many competitors . we are assuming to keep the markup to be 2.5 then the selling price of online stores is as follows:

online stores = Cost of production X2.5

online store selling price = 125X2.5= 312.5

Ans2. per unit contribution = selling price - cost of production

Whole sale = 250-125= 125$

Speciality Stores = 312.5-125=187.5

Online Stores = 312.5-125= 187.5