Pricing Mini Case: Assessing the Cannibalization Risk Cannibalization occurs when a company releases a new product in a product line or family and some % of the sales of the new entrant are because consumers stop buying the old products in favor of the new entrant. In this exercise, you will be asked to assess the exact size of the cannibalization risk. Then, you will be asked to make a series of strategic decisions based on the analyses. Imagine you are the CMO of "Saber Blades". Saber Blades manufactures high quality, extremely durable sci-fi laser sword products that are extremely popular among young adult consumers who enjoy dressing up like their favorite sci-fi characters in movies, books, and comics (the act of dressing up in this way is known as cosplay)....

Based on the values presented below, should Saber Blades introduce The Warrior to the market?

(Yes or No), because the change in Total Monthly Contribution value due to introducing The Warrior is $ (?). (Round to the nearest dollar.)

So the correct answer is No, $1,488 but I would like to know the formulas and how to calculate the answer. thanks.

PLEASE SHOW ALL YOUR WORK AND PROVIDE FORMULAS

Calculate the total monthly contribution values assuming the new product is not introduced and assuming it is introduced.

The total monthly contribution for a product is the product of the total unit sales and the per unit contribution.

The total monthly contribution for all products is simply the sum of all products.

The cannibalization rate tells us what % of a new product's sales volume can be attributed to sales that would be lost from existing products.

Use the following formula in your calculations: (Estimated sales volume of the product) (cannibalization rate) =(# of units of a product lost because of cannibalization)

In this scenario, you were told that Saber Blades doe not incur any additional fixed costs if they choose to introduce the new product line. Thus, Saber Blades should go forward with this new product even after we account for product cannibalization if the change in total monthly contribution is positive. Make sure to round all intermediate calculations to the nearest whole number.

Pricing Mini Case: Assessing the Cannibalization Risk Cannibalization occurs when a company releases a new product in a product line or family and some % of the sales of the new entrant are because consumers stop buying the old products in favor of the new entrant. In this exercise, you will be asked to assess the exact size of the cannibalization risk. Then, you will be asked to make a series of strategic decisions based on the analyses. Imagine you are the CMO of "Saber Blades". Saber Blades manufactures high quality, extremely durable sci-fi laser sword products that are extremely popular among young adult consumers who enjoy dressing up like their favorite sci-fi characters in movies, books, and comics (the act of dressing up in this way is known as cosplay). Click the icon to learn more details about each product. Click the icon to view the data from Saber Blades current financials. Click the icon to view the data from a rigorous market forecast study. Based on the values presented below, should Saber Blades introduce The Warrior to the market? because the change in Total Monthly Contribution value due to introducing The Warrior is $. (Round to the nearest dollar.) Sales Price Variable Cost Contribution per Unit Unit Sales per Month Existing Product: The Apprentice $90 $50 $40 246 Existing Product: The Master $260 $127 $133 84 Sales Price Variable Cost Contribution per Unit Estimated Unit Sales per Month Estimated Cannibalization Rate Existing Product: The Apprentice $90 $50 $40 246 14% NEW Product: The Warrior $140 $139 $1 123 Existing Product: The Master $260 $127 $133 84 6%