management believes they can increase the price


Management believes they can increase the price per chair by 10 percent in this new situation and improve profits by 10 percent. However, the sales department cautions that the price increase may decrease sales by 10 percent because the chairs will be higher-priced than the competition. Because the chair business uses price as one of its major competitive factors, the sales department feels that sales will be hurt. Using our model, what will happen to profits if both of their forecasts are correct?

a. Profits increase 12.5 percent.

b. Profits decrease 11.3 percent.

c. Profits increase 6.7 percent.

d. Profits increase 7.4 percent.

Request for Solution File

Ask an Expert for Answer!!
Operation Management: management believes they can increase the price
Reference No:- TGS0421439

Expected delivery within 24 Hours