What is optimal price and revenue when market responds

Assignment Help Operation Management
Reference no: EM131483214

A startup has just finished developing a new product and they are about to launch. The Data Science team, using historical data has concluded that there are two cases: either the market will respond well to the product in which case the daily demand is given by DH(p)=300-2p or the market will not respond well to the product in which case the daily demand will be given by DL(p)=100-p.

a) What is the optimal price and revenue when the market responds well to the product?

b) What is the optimal price and revenue when the market does not respond well to the product?

c) You are a venture capitalist and you estimate that the probability that the market will respond well is probability 0.7. You are given the option to invest in the company before the launch of the product. How much would you be willing to invest in exchange of 10% of the revenues? You can assume that you expect the startup to be operating for two years.

Reference no: EM131483214

Questions Cloud

What is the foundation for an effective disciplinary system : What should employers do before disciplinary action is initiated against employees? What is the foundation for an effective disciplinary system?
Which is to be low-cost producer by mass -producing product : Explain the R&D strategy approach which is to be a low-cost producer by mass-producing products similar to but less expensive than products crecently introduced
Draw the corresponding decision tree : We are currently the only company in LA selling basketball gear and our revenue is $1,000,000 per year. Draw the corresponding decision tree.
Future supply of and demand for emplyees : difficult for Lowe's to estimate its future supply of and demand for emplyees?
What is optimal price and revenue when market responds : A startup has just finished developing a new product and they are about to launch. What is optimal price and revenue when market responds well to the product?
Discuss the main variable costs in the shipping industry : Identify and discuss the main variable costs in the shipping industry (ocean going, river, etc.).
What are the five key elements of active listening : Listening is a skill. What is active listening? What are the five key elements of active listening?
What is the total annual cost to manage the inventory : What is the optimal order quantity (EOQ)? What is the annual inventory holding cost? What is the total annual cost to manage the inventory?
Use proper notation-appropriate descriptions for notation : You are the regional sales manager for Albertson's grocery store chain. Be sure to use proper notation and appropriate descriptions for each notation.

Reviews

Write a Review

Operation Management Questions & Answers

  Which would you prefer and use in your organization and why

Based on what you have read and discussed so far, comment on which system management standard seems to be the most applicable standard for the manufacturing sector to use in the U.S. Are the three primary standards discussed in this unit differen..

  Describe the ownership-who has liability-who receives profit

Describe the ownership, who has liability, who receives profit and at what proportion. Describe/List the process to register the business. What are the requirements to register this type of business? Who pays taxes? When are taxes paid? What are the ..

  The heavy anchor of ingrained behaviors

Changing a problem culture A Is one of the toughest managerial tasks because of the heavy anchor of ingrained behaviors and ways of doing things. Can be done quickly only if managers tie incentive compensation to exhibiting the desired new cultural b..

  Describe some examples of financial performance metrics

Give us examples from one of your current or past employers and select a company (back your info up with at least 2 articles that you will list) and use critical thought and analysis to explain how it did this.

  Who has just ordered new playground set for his children

Tom, who has just ordered a new playground set for his children, tells his friend Sonya that he will give her his old smaller swing set as soon as the new playground set arrives. To make room for the swing set, Sonya will have to have five trees clea..

  What run quantity should be used to total annual cost

A company is about to begin production of a new product. The manager of the department that will produce one of the components for the product wants to know how often the machine will be available for other What run quantity should be used to minimiz..

  Details strategic benefits of business inelegance systems

Discuss in details the strategic benefits of Business Inelegance systems. Describe several reasons why it is difficult to protect information resources AND compare and contrast risk management and risk analysis. Explain the important role that inform..

  Advanced production management

1. What is the profit-maximizing order-up-to level for cash?2. Suppose Jim is interested in ensuring that the company immediately satisfies all employee salary requirements with a 95% probability. What is the corresponding order-up-to level?

  The basic approaches to ethical decision-making

Explain why you think it's important for a manager to understand the basic approaches to ethical decision-making and what steps a business organization needs to take to ensure ethical conduct.

  Population growth requires more rules to prevent problems

Population growth requires the more rules (laws) to prevent problems (regulate behavior). Since government policies and laws affect businesses, business owners and workers need a voice in government. What do you think are the most important laws gove..

  What is the length of the critical path

Given the activities whose sequence is described by the following table, draw the appropriate activity-on-arrow (AOA) network diagram. What is the length of the critical path

  Describe how will this affect the average time until a job

If the work crew is increased to the point where they can complete 150 squares a day, describe how will this affect the average time until a job is completed.

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