A B C D E F G H I J K

1 Madison pricing problem in U.S., UK, and Japanese markets

2
3 U.S. UK Japan
4 Unit cost 50 40.984 5181.347
5
6 ($/£) ($/¥)
7 Exchange rates 1.22 0.00965
8
9 Parameters of demand functions
10 U.S. UK Japan
11 Constant 19200000 10933620 15003380400
12 Elasticity -2 -2.2 -1.9
13
14 Pricing and sales decisions
15 U.S. UK Japan Equivalent prices in $
16 Price (in local currencies) 99.83 75.00 12317.72 99.83 91.50 118.87
17 Demand 1926.71 819.67 253.62
18 >= >= >=
19 Sales 1926.71 819.67 253.62 Partb:
Part b: All
Allof
of the
thecapacity
capacity isisused
used when
whencapacity
capacity isis
3000.However,
3000. However,ififyou
youchange
changecell
cellD22
D22to to4000
4000and
and
20 rerunSolver,
rerun Solver,you
youwill
willsee
seethat
thatnot
notall
allcapacity
capacityisis
21 Capacity constraint Total sales Capacity used.
used.
22 3000.00 <= 3000
Partc:c: The
Part Theequivalent
equivalent prices
prices inin $$ shown
shownabove
above
23 indicatethat
indicate thatthere
thereisisan
anincentive
incentiveto tobuy
buyin
inthe
theUK.
UK.
24 Monetary summary Sosavvy
So savvycustomers
customerswill
willtry
tryto
totake
takeadvantage
advantageof
of
this,regardless
this, regardlessofof where
wheretheytheylive.
live.
25 U.S. UK Japan
26 Revenues (in local currencies) 192335.24 61474.63 3124006.64
27 Revenues (in $) 192335.24 74999.05 30146.66
28
29 Profit ($) $147,481