Compute the contribution margin

Assignment Help Operation Management
Reference no: EM131948301

BabyGap website is considering how to increase demand for its line of infant clothes. One proposal is to buy a mailing list with 100,000 names of recent parents who have household incomes greater than $40,000 and send them each a coupon for $5 for purchase at the web site.

Gap has to pay $0.50 for each name on the list. It will also incur a mailing cost of $0.50 for every mall it sends out Gap expects the average customer responding to such a promotion win buy clothes worth $50.00 at the web site (including shipping and handling charges).

The average cost for Gap for the clothes will be $20,00. The industry average for purchases arising from such targeted mailings is roughly 6%.

Compute the contribution margin. ($)

Reference no: EM131948301

Questions Cloud

Describe the concept of bank guarantees : Describe the concept of bank guarantees. What are the different types of bank guarantees?
What is the ocf for the project : The Book Store is considering a new four-year expansion project that requires an initial fixed asset investment of $2.1 million.
Discuss the strategic implications of this omission : What did the organization miss in its macro environment? Discuss the strategic implications of this omission.
What are the prices of a call option : What are the prices of a call option and a put option with the following characteristics? (Do not round intermediate calculations and round your answers.
Compute the contribution margin : The average cost for Gap for the clothes will be $20,00. The industry average for purchases arising from such targeted mailings is roughly 6%.
Legitimate excuse for nonperformance : What is an example of a factual situation involving real impossibility of performance?
What is the dollar price you expect to pay : The price quotations of treasury bonds in the wall street journal show an ask price of 104:32 and a bid price of 104:16.
Define equity financing : Why is it so difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?
How much must james put aside at the end year : A recent graduate of a nationally recognized MPA program wants to be able to travel around the world. James does not have enough money at this time.

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd