Sunday, January 5, 2020

Controlling Demand Through Pricing - 1391 Words

Controlling Demand through Pricing: A report on the quantitative analysis of the ChocoMint bar Introduction ChocoMint is a bar of chocolate under ChocoHeaven, which is a distributor of organic chocolate. In recent years, the business of ChocoMint bar encountered some problems. Since the ChocoMint bar is manufactured overseas, the supply chain could be unreliable. Besides, as ChocoMint is stored at special storage locations in the UK, the storage capacity for this kind of product in the UK is limited. Therefore, in order to prevent the storage from exceeding the company’s storage capacity limits, as well as reduce the risk from supply chain (relying less on the overseas supply chain), sales department of ChocoHeaven has been trying to†¦show more content†¦It is not a suitable model for the data that beyond its specific range of domain. Usually, the valid range of domain of a linear equation is quite narrow when it is applied to practical problem. Finally, linear models are typically based on a set of assumptions such as the requirement of simplification of the data. They are not really suitable models for those data with complex context. 4.2 A more appropriate model In the case of ChocoMint bar, the hyperbolic model might be more appropriate. Figure4.2 hyperbolic relationship between monthly demand for ChocoMint and relative prices y = 836.78x-0.854 R ² = 0.8488 R = -0.9213 4.3 Justification of the hyperbolic model’s higher suitability Firstly, compared with the linear model, the value of correlation R of this hyperbolic model is closer to 1. Thus, it indicates that the hyperbolic model represents the relationship between the price and monthly demand much better. Secondly, in the linear model, it shows that when the price decreases to 0 (which means the ChocoMint bar is free), there is a limited demand for ChocoMint bar. However, the demand for free goods are usually infinite in practice, which is exactly demonstrated by the hyperbolic model. As the hyperbolic graph above indicates, when the price is approaching zero, the graph does not intercept the y-axis. On the contrast, it is infinitely close to y-axis with increasing values of monthly demand, whichShow MoreRelatedEconomic Analysis of an Oligopoly Market Structure1715 Words   |  7 Pagesas they encourage competitive pricing, albeit predatory pricing, it is clear that Woolworths and Coles control the supermarket industry in Australia, in the formation of a duopoly. It is evident that Woolworths and Coles engage in predatory pricing in an attempt to eliminate independent retailers from the market. This article discusses recent efforts made by the Australian government and the Australian Competition and Consumer Commission to reduce predatory pricing and, thus, encourage competitionRead MoreThe Crisis Of The Global Oil Crisis1638 Words   |  7 Pagesgrowing competitor US shale industry and the rebounding production in Libya and Iraq, OPEC is losing its ability to control oil prices. A market-linked pricing mechanism was adapted by most oil-exporting countries after the collapse of the OPEC-administered pricing system (long-term oil contracts) in the mid-1980s (Secretariat 65). In the market-linked pricing mechanism, Brent Blend, West Texas Intermediate (WTI), and Dubai Crude are the 3 major benchmarks who served as the reference for the oil of similarRead MoreService Is An Important Part Of The Global Economy Essay1750 Words   |  7 Pagesintangibility, inconsistency, inseparability, and inventory. Intangibility means it can not be touched, held, or seen before the purchase. These services help consumers to get information or show the benefits of their product. Inconsistency is developing, pricing, promoting, and delivering services is complicated because the quality of service is often inconsistent. This is because these services require people to do them, and different people work differently. Inseparably have problem of consistency. ConsumersRead MoreMarketing Principles1212 Words   |  5 PagesStage 8: Commercialization – timing of the launch place etc is needed to plan beforehand.(www.learnmarketing.net) For ACL this is not the end as we need to continue monitoring customers response, choose the right distribution channels, decide about pricing of new product with help of testing customers. 2.2 Explain how distribution is arranged to provide customers convenience. Without good planned distribution of our product ACL will reach their customers. Distribution is achieved by using oneRead MoreMenu planning.1279 Words   |  6 Pagesof maximizing profits from the sale of perishable assets, such as hotel rooms and airline seats, by controlling price, inventory and service. By seizing control of the sold volume at each price level, Yield Management permits a significant augmentation of revenue. Yield Management calculates and defines the most efficient tariffs to optimize revenue on the basis of modeling and forecasting demand. This technique is commonly used in the airline and hotel industry where it is part of those companiesRead MoreSupply and Demand - Pharmaceutical Industry1042 Words   |  5 PagesSupply and Demand Ââ€" Pharmaceutical Industry In today s society, a large percentage of the population requires prescription drugs to treat injury or illness. In some cases, the need for drugs may be short term and in other cases, the drugs may be required for the remainder of an individual s life. In all cases, prescription drugs are not free; the individual or his or her insurance company pays. The type of drug and available substitutions generally drive the costs. In this paper, I will summarizeRead MoreWhat Is Perfect Competition Promotes Market Efficiencies1670 Words   |  7 Pagesinfluence which sector an industry fits into, one being the number of competing firms and the other being barriers to entry. Commensurate with these are different pricing options and strategies undertaken by various firms to reach optimal profit maximization. Altogether, each market contains specific intricacies which effect supply and demand and ultimately management’s response to each. Competition fuels growth, and while one market might regulate competition by its very nature, other markets must carefullyRead MoreThe Cloud Computing Model1737 Words   |  7 Pagesprovision the processing, storage, networks, and other fundamental computing resources with the consumer having the ability to deploy and run arbitrary software, that includes operating systems and applications. With the consumer not managing or controlling the underlying cloud infrastructure but does however control the OS, storage, and deployed applications; while also possibly limiting controls of select networking components such as firewalls. (Peter Mell, Timothy Grance, The NIST Definition ofRead MoreEconomic Principles and the Greeting Card Industry1711 Words   |  7 PagesEconomic Principles The greeting card industry is a major contributor to the success of firms inside the sector. This is because it offers them with a marketplace that is continually in demand. According to Pullen (2013), this is an industry that is realizing $7.5 billion every year in annual sales. As nine in every 10 households is purchasing these products and sending them out to their friends or loved ones. These figures are illustrating the potential market of firms that want to create a uniqueRead MoreChina s Largest Consumer Of Oil Companies ( Nocs )1279 Words   |  6 Pagesway, the national monopoly in China’s oil sector was established with the CNPC and Sinopec controlling all process from extracting, refining, sale to trade. The government’s main goal of the regrouping is to regulate previous disorder in the oil extracting industry and eliminate oil smuggling issues. The regrouping is intended to improve the efficiency in oil sector by imposing more government oversight through the two national companies. However, the regrouping barely achieved the government’s initial

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.