Reference no: EM133664278

Question

A best-selling author is going to publish her new book. As the owner of a local bookstore, you are deciding how many copies of the hardcover book to order from the publisher. You plan to sell the book at the suggested retail price of $30. However, the cheaper softcover version of the book will be released in the summer, which means that any unsold hardcover will have to be sold on clearance for $10. The publisher provides a quantity discount according to the following schedule: Ordering at least Unit cost 0 $24 1500 $23 3000 $22 4500 $21 For example, if the store orders between 0 to 1499 copies, each copy would cost $24; if it orders between 1,500 to 2,999 copies, each would cost $23, and so on. Build an Excel spreadsheet to compute the profit given two inputs: the order quantity (i.e., how many copies to order from the publisher) and the demand (i.e., how many copies customers would like to buy from us).

Hint: The VLOOKUP function may be useful. Create a two-way data table to analyze how profit depends on these two inputs. Vary both the order quantity and demand between the values of 500 to.