A. Pricing (Use the sheets of price elasticity through optimal pricing)
1. Using the ‘price elasticity’ sheet, calculate and interpret the price elasticity when the price increases from $100 to $110. Show the calculation procedure.
|
|
price |
demand |
|
Old |
100 |
500 |
|
New |
110 |
350 |
2. Using the ‘break-even point’ sheet, calculate the break-even point. Explain the calculation procedure.
|
Price (p) |
$100 |
|
Unit Cost (c) |
$60 |
|
Fixed Cost (F) |
$10,000 |
3. Using the ‘Optimal Pricing’ sheet, find the optimal pricing point that maximizes the profit and explain the calculation procedure.
|
Demand |
Q=40-P |
|
Profit |
|
|
Cost |
Unit variable cost (c)=0 and Fixed cost(F)=0 |
4. Based on the answer of Q3, make a scatter plot with profit (Y-axis) and price (X-axis). Explain the relationship between profit and price.
B. Pay per Click
|
Bidder |
Bid ($) |
QS |
Bid*QS |
Slot Won |
(Bid*QS) of Next Bidder |
PPC |
|
A |
4 |
2 |
|
|
|
|
|
B |
6 |
1 |
|
|
|
|
|
C |
3 |
5 |
|
|
|
|
|
D |
2 |
7 |
|
|
|
|
5. Calculate the actual payment per click for each bidder.
6. Show the PPC calculation procedure for Bidder A.
7. If a bidder who did not win an ad placement wants to rank first in the auction, how much should he/she bid? (Explain the calculation procedure)
C. Basket Analysis
|
ID |
meat |
vegetables |
fruit |
|
1 |
1 |
1 |
0 |
|
2 |
1 |
1 |
1 |
|
3 |
1 |
1 |
0 |
|
4 |
0 |
0 |
0 |
|
5 |
0 |
1 |
1 |
|
6 |
0 |
1 |
1 |
|
7 |
1 |
0 |
0 |
|
8 |
1 |
1 |
1 |
|
9 |
1 |
1 |
0 |
|
10 |
1 |
1 |
0 |
8. Based on the data table, calculate the relevant numbers in each table in Excel and paste the complete tables.
9. Calculate the lifts for each pair of the products. Show the calculation procedure using one pair (e.g., vegetables and fruit).
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10. How can a retailer utilize the basket analysis results? (interpret the lift values to explain)