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Throughout the NewShoes Simulation, you will have to evaluate your previous decisions as well as other Market data and information in order to make an informed decision for the current period. The breakeven analysis is a tool that can assist in setting the price for your athletic shoe during the various decision periods. Based on the market data and information presented in the simulation determine the breakeven analysis for your NewShoes company and the correlation to your shoe pricing strategy.
To calculate the breakeven analysis, you can use the following formula:
Break Even Price = variable cost (the unit cost of the product) + fixed expenses (marketing expenses and allocated product development expenses) / projected units
Having calculated the Break Even Analysis, what will you have to price your shoes in order to reach your target run? In addition, provide an assessment of other elements that should be considered in addition to the breakeven analysis to determine the price of your shoes. Research and find an organization that has been challenged with setting prices for their products or services and share how they addressed the issues.
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