Wowza Accessories, a clothing retailer, is planning to introduce a new line of s

Question

Wowza Accessories, a clothing retailer, is planning to introduce a new line of sweaters as part of the winter collection for $65 with an inventory of 1500. The main selling season is 60 days between November and December. The store then sells the remaining units in a clearance sale at 65 percent discount. Out of the 60 main retail days, Wowza sells the sweaters at full retail price for only 45 days, while giving a discount of 25 percent for the remaining 15 days. The demand functions (a) and (b) are given as 79.5 and 1.1 respectively.

Calculate the daily sales during the discount sales period.

D. 388.13

Calculate the total revenue during the discount sales period.

D. $ 43,321.09

The demand functions (a) and (b) are given as 79.5 and 1.1 respectively

Marked Down Pricing Model for Wowza Accessories' new sweater Data Retail Prices $65 Inventory 1500 Selling Season (days) 60 Days at Full Retail 45 Intermediate Markdown 25 percent Clearance Markdown 65 percent Demand Function A 79.5 B 1.1

Explanation / Answer

1) A. 25.88

Daily sales during the discount sales period = a - b * p , where p is the marked down price in discount season.

Daily sales = 79.5 - 1.1*65*(1-.25) = 25.88

2) C. $ 18,921.09

Total revenue during the discount sales period = 25.875*15*65*(1-.25) = 18921.09

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