1. Max Leonard, vice president of Marketing for Dysk Computer, Inc must decide whether to introduce a mid-priced version of the firm’s

1. Max Leonard, vp of Advertising and marketing for Dysk Pc, Inc should determine whether or not to introduce a mid-priced model of the agency’s DC 6900 private pc product line – the DC 6900-X. The DC6900-X would promote for $5,000, with unit variable prices of $1,750. Projections made by an impartial advertising and marketing analysis agency point out that the DC6900-X would obtain a gross sales quantity of fifty,000 items subsequent 12 months, in its first 12 months of commercialization. One-half of the primary 12 months’s quantity would come from opponents’ private computer systems and market development. Nevertheless, a client analysis research signifies that 30 p.c of the DC6900-X gross sales quantity would come from the higher-priced DC6900-0mega private pc, which sells for $4,000 (with unit variable prices of $2,000). One other 20 p.c of the DC6900-X gross sales quantity would come from the economy-priced DC6900-Alpha private pc, priced at $2,500 (with unit variable prices of$ 1,250). The DC6900-0mega unit quantity is anticipated to be 40,000 items subsequent 12 months, and the DC6900-Alpha is anticipated to realize a 60,000-unit gross sales stage. The mounted prices of launching the DC6900-X have been forecast to be $1 million throughout the first 12 months of commercialization. Ought to Mr. Leonard add the DC6900-X mannequin to the road of private computer systems

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Dysk Pc, Inc. Sure.  Mr. Leonard ought to rapidly add the DC6900-X mannequin to the road of private computer systems. Dysk Computer systems can be making extra earnings (contribution margin) following the addition of the brand new mannequin than it might be producing from promoting solely the DC6900-Omega and Alpha fashions. Rationalization: a) Information and Calculations: Contribution with out the DC6900-X:                                          DC6900-0mega   DC6900-Alpha     Whole Anticipated gross sales quantity          40,000              60,000 Unit Value                                $4,000              $2,500 Variable value per unit            $2,000               $1,250 Contribution per unit            $2,000                $1,250 Whole contribution margin   $80 million          $75 million       $155 million Much less misplaced contribution         $30 million       $12.5 million        $42.5 million Internet contribution margin from outdated merchandise =                          $112.5 million b) Misplaced Contribution: a. DC6900-0mega 30% of fifty,000 * $2,000 = $30 million b. DC6900-Alpha 20% of fifty,000 * $1,250 = $12.5 million Whole misplaced contribution =    $42.5 million     c) Gross sales of DC6900-X: Anticipated gross sales quantity          50,000 Unit value                                $5,000 Variable value per unit             $1,750 Contribution per unit             $3,250 ($5,000 – $1,750) Whole contribution margin     $162.5 million ($3,250 * 50,000) Identifiable mounted value                $1.0 million Internet contribution margin       $161.5 million Contribution (outdated merchandise)  $112.5 million Whole new contribution        $274.0 million ($161.5 + $112.5 million) d) If the brand new product isn’t launched, Dysk Computer systems will make $155 million complete contribution margin from promoting its DC6900-Omega and DC6900-Alpha private computer systems.  With the launch of DC6900-X, its complete contribution margin will skyrocket to $274 million after bearing in mind the misplaced gross sales and contribution of $42.5 million that may consequence from the launch of this new laptop.  Ought to Dysk launch the mannequin?  Sure.

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was my reply improper?

Ithink the reply is did a.

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