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Unformatted text preview: Potential national market: 350,000,000 Test Markets Market Size Price 1 144,900 $265.95 570 2 4,627,600 $276.95 17,178 3 1,049,800 $287.95 3,801 4 2,946,500 $299.95 9,941 5 5,042,300 $310.95 15,594 6 3,617,600 $321.95 10,859 Fixed Cost For The Year: $135,000,000 Variable Costs Quantity Cost per card First: 800,000 $160 Next: 400,000 $128 Further: $72 Market Number Projected Yearly Sales (number of cards) MARKETING COMPACTFLASH CARDS Test Market and Production Cost Data this fil the ad Add In Calculus for Business De Release 2.1, 2010 Published and Distribute The Mathematical Association © 2010 by The Arizona Board o The University of Arizona. A reserved. Computation of ile requires that ddin " Solver  In" be enabled. ecisions ted by n of America of Regents for All rights Potential national market (K's): 350,000 Demand Factor: 1.00 Test Markets Market Size Price 1 144,900 $265.95 570 1,377 2 4,627,600 $276.95 17,178 1,299 3 1,049,800 $287.95 3,801 1,267 4 2,946,500 $299.95 9,941 1,181 5 5,042,300 $310.95 15,594 1,082 6 3,617,600 $321.95 10,859 1,051 National Market Market Number Projected Yearly Sales (Number of Cards) Projected Yearly Sales (K's of Cards) $300 $400 $500 Demand Data We fit a second degree polynomial trend line through the data points and form coefficients with 8 decimal places. These are copied into spreadsheet Cells H28:H3 being careful that all signs are copied correctly. y = ax 2 + bx + c MARKETING COMPACTFLASH CARDS Demand, Revenue, Cost, and Profit Functions Prices for individual cardss are given in dollars . All returns on sales in the national market are given in millions of dollars. Quantities of drives in the test markets are actual numbers of cardss . All quantities of drives in the national market are given in thousands of card The Demand Factor will be used at a later time. 1,000 $326.64 q (K's) D ( q ) 400 800 1,200 1,600 2,000 2,400 2,800 $0 $100 $200 Quantity (K's) Price Define the demand function D by D ( q ) = aq 2 + bq + c where q is the quantity, in thousands of cards, that could be sold at the price D ( q ) do The data points for the following plot are given in Columns J and K . 400 800 1,200 1,600 2,000 2,400 2,800 $0 $100 $200 $300 $400 $500 Demand Function q (K's) D(q) The revenue function R is defined by R ( q ) = qD ( q )/1,000 where q is the quantity, in thousands of cards; D ( q ) is the demand function; and R ( q the revenue, in millions of dollars, from sales. The data points for the following plot are given in Columns J and L . 1,000 $326.64 $326.641 Variable Costs (M's) $135.0 Batch Size (K's) Marginal Cost 1 First 800 $160.00 2 Second 400 $128.00 3 Further $72.00 q (K's) D ( q ) R ( q ) (M's) Fixed Cost (M's) 400 800 1,200 1,600 2,000 2,400 2,800 $0 $100 $200 $300 $400 $500 Revenue Function q (K's) R(q) (M's) The total cost function C is defined by C ( q ) = Fixed Cost + Variable Cost For q Cards and C ( q ) is the cost, in millions of dollars....
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 Spring '08
 Strickland
 Double click, Test Markets

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