MATH 1053 - Quantitative Methods for Business

Appendix 3

Q Events' specialist and analytical approach to events has made them grow in popularity and resulted in a positive impact on the market. This success has developed from their simple online platform linked with specialist event assistants to bridge the viability of events and the clients' requests. A massive Wine & Food event, Vinothon, has landed in Q Events' hands and Wilson Lux has tasked you with conducting an analysis into the pricing scheme of the tickets for the event such that the client and Q Events both meet their profit targets.

The recommended agreed selling price between Q Events and the client is $60 per ticket. As Q Events generates their revenue from ticket sales, they agreed to take 40% of the ticket price and an additional credit card fee of 2% of the ticket price per sale. The client agrees to take the remaining 60% of the ticket price.

There are associated fixed costs comprising of salaries, maintenance and operational costs of the website, infrastructure and marketing for the event. In addition, there are variable costs for each attendee per ticket sale of $5 for individual COVID insurance costs.

The client is happy to break-even on Vinothon because they want the event to happen and raise awareness and interest in local winemakers. They pay the cost of $12,000 for venue hire and an associated variable cost for each attendee of $15 per ticket for catering.

Description Cost Staff Salaries $1,000 Infrastructure $1,500 Maintenance + Operational $2,000 Marketing $5,000 COVID Insurance $5 per ticket Table 2: Associated Costs of Q-Events Description Cost Venue Hire $12,000 Catering Costs $15 per ticket Table 3: Associated Costs of Client