3) THIS IS FOR EXCEL: Create a one-way data table using the values in cells B32:B43 after referencing total profit Ccalculated in cell F12) to determine the supplier contract amount that leads to the most profit given that price is $290 and advertising budget is $35,000,000. Enter this contract amount in cell C45. Notice the "supplier contract and profitability" chart updates with the values in the data table to visually demonstrate the relationship between supplier contract amounts and profitability.

Introducing the new, smaller eTablet to market Decisions to be Made Price $350 Supplier Contract $75,000,000 Advertising Budget $35,000,000 Market Information Competitor Pricing $200 Base Demand 1,000,000 Market Size 5,000,000 Variable Cost Calculations Variable Production Costs Prepaid Discount Amount Adjusted Variable Costs $199 $26 $173 Profitability Total Revenue (-) Total Variable Costs (-) Total Fixed Costs $551,250,000 $272,078,355 $110,000,000 Total Profit $169,171,645 Demand Calculations Price Demand Factor Total Demand -75% 1575000 You work on the new product development team for your company's new tablet computer offering, a smaller version of your wildly popular e Tablet line. You have been given the task of determining three important decisions for this new product. First, you have been asked to determine the price for this product. Pricing is a tricky decision. You don't want to price the new tablet too high because few customers will choose the new product over your full-sized tablet offerings and you risk losing sales to your aggressively priced competitors' products. You don't want to price the product too low, because you want to earn as much revenue as possible from the product. Second, you must determine where to set the marketing budget for the new product. You know that there will be a base demand for your product that comes from your loyal customers who will buy just about anything you produce. Beyond that you also know that every dollar you spend on advertising will increase the demand for your product. Of course, there is a limit to how much money you will want to spend on advertising because eventually more money spent on advertising will have little effect on demand and will reduce the profitability of the new product. Finally, you have been asked to help decide how much money to prepay to the suppliers of the raw materials of the new product to reduce the overall costs of these materials. Every dollar you spend on prepaying your suppliers will reduce the costs of these materials and will ensure that your competitors don't have access to these materials. You have completed a spreadsheet modelto aid in your analysis. Use the 'What If Analysis options in Excelto help you determine the right price, advertising spending, and prepaid supplier contract forvour new product Inputs Decision Set 1 Decision Set 2 Decision Set 3 Decision Set 4 Price (C3) $200 $250 $329 $250 Supplier Contract (C4) $50,000,000 $75,000,000 $100,000,000 $20,000,000 Advertising (C5) $25,000,000 $25,000,000 $50,000,000 $50,000,000 Which Scenario is most profitable? GoalSeek Parameters and Results Set Cell To Value By Changing Cell Supplier Contract and Profitability 1.2 Resulting Price? 1 0.8 0.6 0.4 Supplier Contract and Profitability Supplier Contract $0 $10,000,000 $ $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $ $70,000,000 $80,000,000 $90,000,000 $100,000,000 0.2 0 50 $10,000,000 $30,000,000 50.000.000 000 do $20,000,000 $20,000.00 $40.000.000 $ 70,000,000 $90,000,000 $ 100,000,000 Supplier Contract Level Optimal Supplier Contract? 23 24 25 26 27 28 29 30 GoalSeek Parameters and Results Set Cell To Value By Changing Cell Supplier Contract and Profitability 1.2 Resulting Price? 1 1 31 0.8 0.6 0.4 Supplier Contract and Profitability Supplier Contract $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 co $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000 32 33 34 35 36 37 38 39 20 40 41 42 43 44 45 46 0.2 0 SO $10,000,000 000 000 $ 000 000'CES $40,000 0.000000 000 voos Son 3.000.000 $60.000.000 $80,000,000 $90,000,000 $100,000,000 OptimalSupplier Contract? Advertising Budget $50.000.000 $ Price, Advertising, and Profitability ST $75.000.000 $1 $1 $1 Total Profit $ -$25,000,000 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Price $200 $210 $220 $230 $240 $250 $260 $270 wer $280 $290 $300 wewe $310 $320 $330 www $340 $350 $360 $370 wory $380 $390 $400 So $o SO $200 $ 210 $ 220 $ 230 $240 $250 $250 $270 $280 $ 230 $300 $310 $320 $330 $310 $ 350 $360 $370 $380 $390 $400 Price How much should they spend on advertising? Where should they set their price? 73 Introducing the new, smaller eTablet to market Decisions to be Made Price $350 Supplier Contract $75,000,000 Advertising Budget $35,000,000 Market Information Competitor Pricing $200 Base Demand 1,000,000 Market Size 5,000,000 Variable Cost Calculations Variable Production Costs Prepaid Discount Amount Adjusted Variable Costs $199 $26 $173 Profitability Total Revenue (-) Total Variable Costs (-) Total Fixed Costs $551,250,000 $272,078,355 $110,000,000 Total Profit $169,171,645 Demand Calculations Price Demand Factor Total Demand -75% 1575000 You work on the new product development team for your company's new tablet computer offering, a smaller version of your wildly popular e Tablet line. You have been given the task of determining three important decisions for this new product. First, you have been asked to determine the price for this product. Pricing is a tricky decision. You don't want to price the new tablet too high because few customers will choose the new product over your full-sized tablet offerings and you risk losing sales to your aggressively priced competitors' products. You don't want to price the product too low, because you want to earn as much revenue as possible from the product. Second, you must determine where to set the marketing budget for the new product. You know that there will be a base demand for your product that comes from your loyal customers who will buy just about anything you produce. Beyond that you also know that every dollar you spend on advertising will increase the demand for your product. Of course, there is a limit to how much money you will want to spend on advertising because eventually more money spent on advertising will have little effect on demand and will reduce the profitability of the new product. Finally, you have been asked to help decide how much money to prepay to the suppliers of the raw materials of the new product to reduce the overall costs of these materials. Every dollar you spend on prepaying your suppliers will reduce the costs of these materials and will ensure that your competitors don't have access to these materials. You have completed a spreadsheet modelto aid in your analysis. Use the 'What If Analysis options in Excelto help you determine the right price, advertising spending, and prepaid supplier contract forvour new product Inputs Decision Set 1 Decision Set 2 Decision Set 3 Decision Set 4 Price (C3) $200 $250 $329 $250 Supplier Contract (C4) $50,000,000 $75,000,000 $100,000,000 $20,000,000 Advertising (C5) $25,000,000 $25,000,000 $50,000,000 $50,000,000 Which Scenario is most profitable? GoalSeek Parameters and Results Set Cell To Value By Changing Cell Supplier Contract and Profitability 1.2 Resulting Price? 1 0.8 0.6 0.4 Supplier Contract and Profitability Supplier Contract $0 $10,000,000 $ $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $ $70,000,000 $80,000,000 $90,000,000 $100,000,000 0.2 0 50 $10,000,000 $30,000,000 50.000.000 000 do $20,000,000 $20,000.00 $40.000.000 $ 70,000,000 $90,000,000 $ 100,000,000 Supplier Contract Level Optimal Supplier Contract? 23 24 25 26 27 28 29 30 GoalSeek Parameters and Results Set Cell To Value By Changing Cell Supplier Contract and Profitability 1.2 Resulting Price? 1 1 31 0.8 0.6 0.4 Supplier Contract and Profitability Supplier Contract $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 co $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000 32 33 34 35 36 37 38 39 20 40 41 42 43 44 45 46 0.2 0 SO $10,000,000 000 000 $ 000 000'CES $40,000 0.000000 000 voos Son 3.000.000 $60.000.000 $80,000,000 $90,000,000 $100,000,000 OptimalSupplier Contract? Advertising Budget $50.000.000 $ Price, Advertising, and Profitability ST $75.000.000 $1 $1 $1 Total Profit $ -$25,000,000 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Price $200 $210 $220 $230 $240 $250 $260 $270 wer $280 $290 $300 wewe $310 $320 $330 www $340 $350 $360 $370 wory $380 $390 $400 So $o SO $200 $ 210 $ 220 $ 230 $240 $250 $250 $270 $280 $ 230 $300 $310 $320 $330 $310 $ 350 $360 $370 $380 $390 $400 Price How much should they spend on advertising? Where should they set their price? 73