Frankie is a buyer for a department store and is buying some handbags at a cost of $30 from a vendor. He desires to have a 60% markup to meet the financial goals of this category.

What will be the retail price of these handbags?

After several months, the store encounters some price reductions due to markdowns (sales), discounts to employees and inventory shrinkage. The amount of the reductions come down to $15 per bag.

What will be the Maintained Markup of these handbags?

What did you learn from this analysis? Was maintained markup lower than planned markup? Could the reductions in price be avoided?