Question
Follow up question ( note that the dollar amounts have not changed from the previous scenario. ) You help couples book their perfect honeymoon.You currently
Follow up question(note that the dollar amounts have not changed from the previous scenario.)
You help couples book their perfect honeymoon.You currently offer plans for a cruise and for a casino stay.
Your sales manager is getting her MBA and has suggested you might consider mixed bundling as a way to boost profits.
The table below shows the customer preferences.Your costs are$100for the first booking in a customer's name and$50for each additional booking in the same customer's name.
"We Book Your Honeymoon Tour"
Cruise
Casino
Customer1
$7,000
$3,000
Customer2
$2,000
$6,000
You know that about 21% of your customers decline cruises because of seasickness.At least 12% decline the casino trip saying they don't believe in gambling.As a rough approximation, you estimate that approximately 33% of your customers will never bundle.Given the preferences distribution, will mixed bundling increase profits?You must show the calculations that support your conclusion.
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