Reference no: EM132758605
Assignment: Consider the Costs
"The menu looks great, but tell me about the prices one more time," said Nigel, the manager of the Old Dublin Pub. Nigel was talking to Alice Petoskey, the sales representative for Image Custom Printing.
Nigel had asked Alice for a quote on producing new paper menus for the pub.
He and Alice were discussing prices for printing the beautiful menu Alice's company had designed for him.
"Okay," replied Alice, "there is a one-time design and set-up fee of $1,500, no matter how many pieces we print. After that fee, the menus are only $2.50 per copy if you buy fewer than 100 copies, $1.90 per copy if you buy between 100 and 200 copies, and, like I was telling you, the best deal for you is if you buy more than 200 copies. Then the price per copy goes down to only $1.50!
1. What would Nigel's total payment to Alice's company be if he purchases 75 menus? 175 menus? 275 menus? Use the following table to help you with your answer.
Number of Copies Cost per Copy Set-Up Fee Total Cost Cost per Menu
2. What additional menu change-related costs will Nigel likely incur if he decides to implement a new paper menu?
3. Assume that you are Nigel. Are there other alternatives available to you today that could effectively communicate your menu to customers without your incurring significant printing costs?
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