Question
3. A 3D printing machine company is currently selling printers at a price of $900. It costs $600 to make one printer and they currently
3. A 3D printing machine company is currently selling printers at a price of $900. It costs $600 to make one printer and they currently sell 9000 per month in each of 5 similar markets. Based on previous research, they have found that dropping the price initially increases the units sold at a rate of 70 per dollar but this eect tapers o completely when the price reaches $200. Normally, they also spend $50000 on advertising in each market. However, in the last year, they have increased the advertising budget by $5000 in one test market and noticed the following sales figures over 12 months.
Month | Sales |
Jan | 9040 |
Feb | 9070 |
Mar | 9030 |
April | 9080 |
May | 9090 |
June | 9120 |
July | 9130 |
Aug | 9075 |
Sept | 9140 |
Oct | 9170 |
Nov | 9220 |
Dec | 9240 |
A. Assume that these sales numbers are not from an approximately normal distribution, and assume that the com- pany will not spend more than $90000 on advertising in any market. Find a reasonable range of optimal price, advertising budget, and maximum profit. B. What is the worst possible benefit from raising the advertising limit by another $100?
C. What is the highest reasonable sensitivity of optimal price, advertising budget, and maximum profit to the 70 per dollar rate given above? D. (This is unrelated to A,B,C) Make a prediction interval for NEXT January sales in the test market. Comment on the fit of your prediction model to the data and the uncertainty due to your sample.
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