Retailer Note 3 - Note PDF

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Retailer Note: 1. Special line of knit shirts: replace 2.5% of the current volume Manufacture Lost: $0.5 per unit If sales are not enough to cover huge production costs within 4 months, Manufacturer will stop producing this new product line. 2. Fill orders in 7 days instead of the usual 10 days Manufacture Lost: 5 cents per unit Manufacture Gain: decrease the likelihood of substitution 3. To increase the three yearly special price promotions to four 4. Increase the cash discount period to 15 days instead of the current 10 day cash discount period Manufacture Lost: 5 cents per unit 5. Specially designed packaging for 10% of current volume ordered for three months at no extra cost Manufacture Lost: 3 cents per unit

Term Increasing quantity ordered from 500 to 600 unites Cut 3% on net margin per unit

Result for Manufacturer Gain: 500,000 x $0.07 = $35,000 Gain: 500,000 x $2 x 3% = $30,000

Result for Retailer Loss: 500,000 x $0.03 = $15,000 Loss: 500,000 x $2 x 3% = $30,000

Advertising twice monthly

Loss: 500,000 x $0.02 = $10,000 Loss: $800 x 75 x 50% = $30,000 Loss: 500,000 x $0,5 = $250,000 Loss: 500,000 x $0.05 x 7 days = $175,000

Loss: 500,000 x $0.02 = $10,000 Loss: $800 x 75 x 50%= $30,000

Cost of 75 Trolleys: Special line of knit shirts Fill orders in 7 days instead of the usual 10 days Increase the yearly special price promotions Increase the cash discount period to 11 days Specialy designed packaging for onee month TOTAL:

Loss (if): 500,000 x $0,05= $25,000 Loss: 500,000 x $0,01 x 1 Gain: 500,000 x $0,01 x 1 days = $5,000 days = $5,000 Loss: 500,000/12 x 1 month x $0,03 x 10% = $175 Loss:$430,175 Loss:$80,000...