Assignment:
Review the attachment and response below:
1. What factors are most likely to affect demand for the lines of Washburnguitars
(a) bought by first-time guitar buyers and
(b) by a sophisticated musicianwho wants a signature model?
2. For Washburn, what are some factors that may cause the demand curve forthe new guitar line to shift (movement of the demand curve)?
3. In Washburn's Chicago plant, what is the break-even point in units and Sales(BEP) for the new line of guitars if the suggested retail price is
(a) $850,
(b) $900,
(c) $1000
4. If Washburn achieves the sales target of 25,000 units at $850 suggestedretail price, what will its profit be?
5. Assume that Washburn moves its production to Nashville and that the costsare reduced as projected in the case. Given a $850 suggested retail price,what will be the new
(a) BEP in units
(b) BEP in Dollars
6. Assume that Washburn negotiates a new retail markup of 35%, with asuggested retail selling price of $850,
(a) what is Washburn's new selling price per guitar to retailers
(b) what is Washburn's new BEP in units, and
(c) what is Washburn's new BEP in dollars?
7. If for competitive reasons, Washburn eventually has to move all its productionto China,
(a) which specific costs might be lowered and
(b) what additional costsmight it expect to incur?
8. With all of the options given in this case, answer the following questions in anexecutive summary format. Do show your supporting research data and providea references page.
What environmental factors might be of most interest to Washburn andwhy?
Which manufacturing facility would you recommend and why?
Which retail pricing strategy would you choose and why? In addition,which U.S. manufacturing facility would you choose?
What is the most likely target market for the new guitar line? Do explainthis market in detail using
o Demographics
o Geographics
o Psychographics
o Buyer Behaviors
What is your recommendation for moving forward? How and Why?
Attachment:- Quantitative Analysis-Decision Making Case.rar