Consider the four price promotion campaigns, where all three periods are of the same duration (3 weeks). The selling price per unit is $8, and the contribution per unit is $4.

Based on the information contained in the above table and considering that there is 30% price deduction for the sale3, calculate the net contribution to profit (contribution foregone from baseline sales and contribution from incremental sales) and evaluate whether the price promotion is profitable for the sale 3
 

Transcribed Image Text:

Week Baseline Promotion 1 2 3 5 6 7 9 10 Post promotion 12 Sales 1 876 894 1245 1187 1637 1700 985 1436 1194 Sales 2 876 1255 1143 2325 1876 2195 543 768 324 Sales 3 Sales 4 837 679 987 1643 1545 1943 1157 1076 1127 138 946 1036 1098 2438 2546 2567 356 897 Week Baseline Promotion 1 2 3 5 6 7 9 10 Post promotion 12 Sales 1 876 894 1245 1187 1637 1700 985 1436 1194 Sales 2 876 1255 1143 2325 1876 2195 543 768 324 Sales 3 Sales 4 837 679 987 1643 1545 1943 1157 1076 1127 138 946 1036 1098 2438 2546 2567 356 897

Answer rating: 100% (QA)

The answer provided below has been developed in a clear step by step manner Step ... View the full answer