Your favorite place to visit is a local microbrew. The beer here is so good that the
Question:
Your favorite place to visit is a local microbrew. The beer here is so good that the owner of the microbrew has earned the nickname Dr. Lupulin. While engaging in small talk while enjoying your 3rd triple IPA, Dr. Lupulin tells you he is super confused on how much money they are making. Their spreadsheet states they should make $20 every night but most nights they make much more and they do not understand why.Even though beer consumption has impaired your judgement, you are pretty sure you know why Dr. Lupulin underestimates profits. As part of your MBA, you have hopefully learned that most people assume average inputs equals average outputs and when people assume average inputs equals average outputs, they will either overestimate the outcome or underestimate the outcome.
You suggest to Dr. Lupulin that you have a strong hunch to why this is happening and offer immediate consulting in exchange for a growler of your favorite beer.
incorporate uncertainty into this model and explain to Dr. Lupulin in a presentation file why their spreadsheet underestimates profit. Also be sure to share the enhanced spreadsheet. Please assume that 1) Unit Sales Price and 2) Unit Cost are numbers we have/know.
Advertising and Integrated Brand Promotion
ISBN: 978-0538473323
6th edition
Authors: Thomas O'Guinn, Chris Allen, Richard Semenik