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Use the Excel Solver plugin to determine the optimal price for a single product. Use the information below to formulate your pricing optimization problem:
-Demand as a function of price: D(p) = 2000-10p
-Unit Variable cost of product: c=$8 per unit
-Price must be no more than $110 per unit to be competitive in the marketplace
a) Provide the algebraic (mathematical) formulation of the pricing optimization problem that maximizes the total contribution.
b) Determine the optimal solution of the problem using Excel Solver. Select the GRG Nonlinear as your solving method in the Solver Parameters window before you solve the problem.
i. Show the optimal solution, including optimal values of the decision variable(s) and the optimal value of the objective function.
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