Question
Brand Products imports Peruvian sweaters and sells them wholesale. Lidla is a large retailer with 50 different warehouse stores across Europe. Brand normally purchases sweaters
Brand Products imports Peruvian sweaters and sells them wholesale. Lidla is a large retailer with 50 different warehouse stores across Europe. Brand normally purchases sweaters for 5 each and ships them via boat to Amsterdam for 0.50 apiece. Brand normally sells the sweaters for 10 apiece, but Lidla is considering the purchase of 1,000 sweaters and wants the price reduced to 8 each. Lidla also wants the 1,000 sweaters delivered in a month. Brand will have to air freight the shipment for 1,000. Lidla also expects Brand to put Lidla labels on the sweaters and ship them directly to the warehouse stores. The labeling will require 20 hours of labor at 10/hour. The shipping to the warehouse stores will cost 0.40 per sweater.
What is the profit to Brand of having Lidla as a customer?
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