BUS 620 Answer the following questions 1 GR Dry Foods Distributor specializes in the wholesale distr 1 answer below »

BUS 620
Answer the following questions
1 GR Dry Foods Distributor specializes in the wholesale distribution of dry goods, such as
rice and dry beans The firm’s manager is concerned about an article he read in this
morning’s WSJ The article indicated that the incomes of individuals in the lowest income
bracket are expected to increase by 10 percent over the next year While the manager is
pleased to see the group doing well, he is concerned about the impact this will have on
the business What is likely to happen to the price of the products GR Dry Foods sells
and why? Be sure to include a brief discussion of the topic and why it is that particular
discussion Also, explain the short-term versus long-term decision, if applicable

2 The owner of a small chain of gasoline stations in a large Midwestern town read an article
in a trade publication that the price-elasticity-of-demand for gasoline in the US is -02
Because of this, he is thinking about raising prices to increase revenues and profits He
has asked for your recommendation on this strategy What would you recommend, and
why? Show any calculations you determined Explain why elasticity is important for
business decision making

3 Suppose a CEO’s goal is to increase profitability and output from her company by
bolstering its sales force and that it is known that profits as a function of output are p =
40q– 2q2 (in millions of US dollars) Graph the profit function Compare and contrast
output and profits using the following compensation schemes, based on the assumption
that sales managers view output and profits as “goodsâ€:
a The company compensates sales managers solely based on output
b The company compensates sales managers solely based on profits
c The company compensates based on the combination of output and profits
Provide all calculations with the comparison and contrast discussion

4 In the aftermath of a hurricane, an entrepreneur took a one-month leave of absence
(without pay) from her $5,000-per-month job in order to operate a kiosk that sold fresh
drinking water During the month she operated this venture, she paid the government
$2,500 in kiosk rent and purchased water from a local wholesaler at a price of $134 per
gallon If consumers are willing to pay $225 to purchase each gallon of fresh drinking
water, how many units will she have to sell in order to turn a profit? Provide your
calculations and explain how this can be applied to other businesses

5 Last month, you assumed the position of manager for a large car dealership The
distinguishing feature of this dealership is its “no-hassle†pricing strategy; prices (usually
well below sticker) are posted on the windows, and your sales staff has a reputation for
not negotiating with customers Last year, the company spent $2 million on
advertisements to inform customers about its “no-hassle†policy and had revenues of
$40 million A recent study from an ad agency indicates that for each 3 percent increase
in TV advertising expenditures, a car dealer can expect to sell 12 percent more cars, but
that it would take a 4 percent decrease in price to generate the same 12 percent increase in units sold Assuming the information is correct, should you increase or
decrease your firm’s level of advertising? Explain Show all calculations and provide the
reasoning as clearly and concisely as possible

6 Based on the articles you read for class which one was the most important and why?

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