Should the delivery service charge one price or will segmentation increase profits?Support your conclusion by calculating the profit from each strategy provided in Questions 4, 5, & 6.

Question 4

Seven years ago, you started a crosstown delivery service. The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists. You have two types of service. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs. As a way to introduce the new package service when you implemented the small package service, you charged the same price for packages as parcels. You are now wondering if you should charge different prices for the parcel and package service.

Price Parcels & Packages TR MR TC MC MR-MC Profit

100 50 5000 0 1600 0 0 3400

90 120 10800 83 2300 10 73 8500

80 190 15200 63 3000 10 53 12200

70 260 18200 43 3700 10 33 14500

60 330 19800 23 4400 10 13 15400

50 400 20000 3 5100 10 -7 14900

40 470 18800 -17 5800 10 -27 13000

30 540 16200 -37 6500 10 -47 9700

20 610 12200 -57 7200 10 -67 5000

10 680 6800 -77 7900 10 -87 -1100

Question 5

Seven years ago, you started a crosstown delivery service.The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists.You have two types of service.You have a small parcel service for anything that is flat and measures less than 11x17.You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs.As a way to introduce the new package service when you implemented the small package service, you charged the same price for packages as parcels.You are now wondering if you should charge different prices for the parcel and package service.

Price Parcels & Packages TR MR TC MC MR-MC Profit

100 0 0 0 1150 0 0 -1150

90 50 4500 90 1650 10 80 2850

80 100 8000 70 2150 10 60 5850

70 150 10500 50 2650 10 40 7850

60 200 12000 30 3150 10 20 8850

50 250 12500 10 3650 10 0 8850

40 300 12000 -10 4150 10 -20 7850

30 350 10500 -30 4650 10 -40 5850

20 400 8000 -50 5150 10 -60 2850

10 450 4500 -70 5650 10 -80 -1150

Question 6

Seven years ago, you started a crosstown delivery service.The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists.You have two types of service.You have a small parcel service for anything that is flat and measures less than 11x17.You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs.As a way to introduce the new package service when you implemented the small package service, you charged the same price for packages as parcels.You are now wondering if you should charge different prices for the parcel and package service.

Price Parcels & Packages TR MR TC MC MR-MC Profit

100 50 5000 0 450 0 0 4550

90 70 6300 65 650 10 55 5650

80 90 7200 45 850 10 35 6350

70 110 7700 25 1050 10 15 6650

60 130 7800 5 1250 10 -5 6550

50 150 7500 -15 1450 10 -25 6050

40 170 6800 -35 1650 10 -45 5150

30 190 5700 -55 1850 10 -65 3850

20 210 4200 -75 2050 10 -85 2150

10 230 2300 -95 2250 10 -105 50