Kohls is introducing a new brand of bathing suits for $70. The prime selling season is 50
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- Kohl’s is introducing a new brand of bathing suits for $70. The prime selling season is 50 days during the late spring and early summer; after that, the store has a clearance sale around July 4 and marks down the price by 70% (to $21.00), typically selling any remaining inventory at the clearance price. Merchandise buyers have purchased 1,000 units and allocated them to the stores prior to the selling season. After a few weeks, the stores reported average sales of 7 units/day, and past experience suggests that this constant level of sales will continue over the remainder of the selling season. The local store manager has developed an Excel model in the HW5Data spreadsheet under the tab, Kohl's. Use the appropriate Excel What-if function to produce the following information for the manager:
- Clearance revenue varying clearance markdown from 50% to 90% in increments of 5%. Include your analysis within the same tab in a clearly identified area.
- Retail price necessary to achieve a total revenue of $60,000. Include your analysis in a separate tab labeled Kohl's.
Data | ||
Retail price | 70.00 | |
Inventory | 1000 | |
Selling season (days) | 50 | |
Days at full retail | 40 | |
Intermediate markdown | 40% | |
Clearance markdown | 70% | |
Demand function | ||
a | 91 | |
b | 1.2 | |
Model | ||
Full Retail Sales | ||
Retail price | $70.00 | |
Daily sales | 7.00 | |
Days at retail price | 40 | |
Units sold at retail | 280 | |
Retail revenue | 19,600.00 | |
Discount Sales | ||
Discount | 40% | |
Discount price | $42.00 | |
Daily sales | 40.60 | |
Unit sold | 406 | |
Discount revenue | $17,052.00 | |
Clearance Sales | ||
Clearance price | $21.00 | |
Units sold at clearance | 314 | |
Clearance revenue | $6,594.00 | |
Total revenue | $43,246.00 |
Related Book For
Financial Algebra advanced algebra with financial applications
ISBN: 978-0538449670
1st edition
Authors: Robert K. Gerver
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