Week 6 Assignment 2 Submission Click the link above to submit your assignment. Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center. Instructors, training on how to grade is within the Instructor Center. Assignment 2: Operations Decision Due Week 6 and worth 300 points Using the regression results and the other computations from Assignment 1, determine the market structure in which the low-calorie frozen, microwavable food company operates. Use the Internet to research two (2) of the leading competitors in the low-calorie frozen, microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide). Write a six to eight (6-8) …show more content…
Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response. (Hint: Your firm’s price must cover average variable costs in the short run and average total costs in the long run to continue operations.) 5. Suggest one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Provide a rationale for your suggestion. (Hints: * In Assignment 1, you determined your firm’s market demand equation. Now you need to find the inverse demand equation. Having found that, find the Total Revenue function for your firm (TR is P x Q). From your firm’s Total Revenue function, then find your Marginal Revenue (MR) function. * Use the profit maximization rule MR = MC to determine your optimal price and optimal output level now that you have market power. Compare these values with the values you generated in Assignment 1. Determine whether your price higher is or lower.) 6. Outline a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions. (Hints: * Calculate profit in the short run by using the price and output
Smith’s Country Ham has been operating for 25 years in North Carolina in the wholesale food division, targeting restaurants and fast food chains. In order to increase turnover and therefore revenue, Smith’s decides to introduce a new product line: Smith’s Home Food. A product line containing 11 packages sold to households and including all kinds of foods: meat, vegetables, fruits etc. lasting for a period of 4 months. The prices of these packages range from $655 to $1532 ($1000 on average). These packages require a freezer and thus Smith provided the sale of freezers for customers that didn’t own any. Also, it is highly important to mention that Smith gave all its customers the
The Regional Food Manager for Ye Olde FoodKing Company has retained Mark Craig of Blue Steel Consulting to perform a regression analysis to forecast demand of your product. The four characteristics readily available included price, competitors’ price, average income, and market population. The results of each regression analysis are presented at the end of this memo. The remainder of this memo describes the regression analysis used and limitations to the data available. Running a regression provides a statistical procedure to estimate the liner dependency of one or more
2. Refer to the above table to answer this question. Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1, what is the maximum quantity that Mia might purchase?
Using benchmarked data, Kudler Fine Foods can "reduce costs of ordering foods and minimize the amount of food to be stored, while also having a zero stock out policy [and develop] a supplier relations program " (Apollo Group 2, 2005) These initiatives will reduce Kudler Fine Foods ' internal costs which can be passed on to the consumers.
In anticipation of rising prices in the low-calorie frozen microwaveable food market companies should consider branding, product differentiation, competitive and temporary discount pricing strategies. The frozen microwavable food company is a monopolistic market. The demand function for low calorie microwavable food depends largely on the
Is there a way to estimate the cost of services and product to customers such that Stuart’s Branded Foods can be competitive in their market? Use the illustrations of the two customers to demonstrate your approach. What would be the selling price per kit or per cup for each customer?
Assess the factors that contributed to the financial failure of the firm, indicating how management failed to manage the risk related to each factor.
2. Economy: The recent financial economic turmoil and increasing unemployment are threats for the company.
Investing is one of the most important decisions for a business. Investment is the purchase or creation of assets with the objective of making gains in the future. In this paper we will begin with outlining a plan that managers can take in the case for low-calorie froze microwaveable foods in anticipation of raising prices when selecting pricing strategies for making their products to a change in price less elastic. Then the paper will examine the major effects that government policies have on production and employment. Predictions will be made based on the potential effects that government policies could have on the low calorie microwavable food company. The paper will then introduce whether or not government regulation is necessary to
As we examine the market for low- calorie frozen microwavable foods today, the competitors in the market are Lean Cuisine and Healthy Choice. This paper will discuss another competitor in the market that is competing for the number one spot. In this market we are considering an imperfect competitive market. First, I will outline a plan that will assess the effectiveness of the market structure for the company’s operations. Next, I will determine two factors that changed the market structure from perfect to imperfect competition. Then, I will analyze the major short run and long run cost functions for this company given certain cost functions. I will analyze substantive ways in which the company can use that information to make decisions
Low –calorie foods are those with 40 calories or less per serving. The low calorie frozen foods is the choice for a healthy and easy to cook meal. There are several choices of low calorie frozen, microwaveable food products available in the market nowadays (Creasy, 2015). This implies that the market structure is somewhere between a monopolistic and oligopolistic competition, leaning more towards monopolistic competition (Economicsonline.co.uk, 2015). The low-calorie frozen food products available in the market are relatively similar with slight differentiation amongst them.
3. What are the biggest risks faced by the firm in the next 5-10 years?
The low calorie frozen microwaveable food companies are presently operating under a monopolistic market structure. There are many sellers of the same types of frozen foods but are distinguished by packaging and/or ingredients used. The frozen food companies are undergoing the high cost of production in order to sustain the same level of profitability. This industry has evolved significantly over the years. Consumer purchase trends are regularly moving with the developing economic changes and causing increased pricing and inflation. This report will examine the steps that managers in the low-calorie microwaveable food market can take to face anticipated challenges. The survival of the low-calorie frozen microwaveable food is dependent on its sales volume in the midst of expected price changes (Plessis & Doppegieter, 2012). The low-calorie microwaveable food company should aim at increasing their price to maximize profit in a monopolistic competition. Price elasticity of demand has a major role here and offers the economic rational to increase or decrease the price based on this scenario (Hirschey, 2009). Managers could also sketch a plan that makes the changes in price less elastic by targeting brand awareness and product differentiation.
The first year of operations will be dedicated to launching the initial product line of microwavable meals. The company will focus its efforts on the initial product launch and advertising. During the first year, the company will evaluate sales on a quarterly basis and assess the potential for new products.
a) Draw Brennan's average total, marginal revenue and marginal cost curves. (Hints: calculate total revenue (P* times Q) first, and then calculate MR)