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Case Study: You are the owner of a bakery in GTA. You have a loyal clientele, and your product/service is positioned well in the marketplace. The retail price your customers pay for bread or pastry is exactly the same as at your competitors. However, the wholesale price you pay for your gluten-free flours (from which you make your pastries) has just increased by 25%. You know that you cannot absorb this increase and that you must pass it on to your customers. However, you are concerned about the consequences of an open price increase. You must forecast the possibilities of two alternative price-increase strategies that address these concerns. Also, consider the external and internal variables that might impact your ability to implement each of these three strategies. Hint: think about the fixed and variable costs of this operation - how might these be incorporated in your answer. Document your answer in no more than two pages. Note:
Question 1. Explain why it is important for operations managers to understand the local culture and practices of the countries in which a firm does business. What are some of the potential consequences if they don't?
Question 2. Provide an example where you have compared a good or service by its value and compared perceived benefits and price. How did your assessment of value led to a purchase (or non- purchase) decision?
Question 3. Do you think you will be working in manufacturing or services when you graduate? What do you think will be the role of manufacturing in the U.S. economy in the future?
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