Answers to Select End of Chapter Questions
16. Since we have the profits from all three scenarios we just to compare the present values of each scenario. We do not need to subtract anything from the present value since the costs have already been subtracted from profits.
We can see that we have the highest present value of $290.87 when we use high advertising intensity. Therefore this is the recommended scenario.
Q2. This question deals with margin analysis, we will look at incremental revenues and costs and see whether they are worth it. On the revenue side we have an increase on 9807700, however we also have incremental costs of television airtime, ad development and a loss of $6000000 in another division
We can see that when we add up the incremental costs, they exceed the extra revenues by 317100. Therefore I do not recommend that this campaign to be undertaken.
Q21. Producer ---Producer. The Brazilian and five other producers are competing against the US Southern Shrimp Alliance. Both groups are competing to provide the customers with the best shrimps at the lowest cost. However currently the Brazilian Producers have an advantage with their lower labor, cheap land etc.
Government and Market; According to the current scenario, the Brazilian Group would be choice of the market since they can produce it much cheaper. However, the Sourthern Alliance is trying to lobby the Government into imposing tariffs Brazilian Imports.
Consumer Producer Rivalry; The American Seafood Distributors, which represent consumers of shrimp farming, are interested in having the lowest cost. They are supporting the Brazilians and can potentially choose not to buy from the US based shrimp farmers.
Consumer – Consumer Rivalry; Is pretty low, since they have banded together to form the American Seafood Distributors.
Five Forces Analysis: Shrimp Farming Industry
Power of Buyers; High
Buyers have formed the American Seafood Distributors, which means they can ask negotiate in bulk and choose whether they buy
We can see that we have the highest present value of $290.87 when we use high advertising intensity. Therefore this is the recommended scenario.
Q2. This question deals with margin analysis, we will look at incremental revenues and costs and see whether they are worth it. On the revenue side we have an increase on 9807700, however we also have incremental costs of television airtime, ad development and a loss of $6000000 in another division
We can see that when we add up the incremental costs, they exceed the extra revenues by 317100. Therefore I do not recommend that this campaign to be undertaken.
Q21. Producer ---Producer. The Brazilian and five other producers are competing against the US Southern Shrimp Alliance. Both groups are competing to provide the customers with the best shrimps at the lowest cost. However currently the Brazilian Producers have an advantage with their lower labor, cheap land etc.
Government and Market; According to the current scenario, the Brazilian Group would be choice of the market since they can produce it much cheaper. However, the Sourthern Alliance is trying to lobby the Government into imposing tariffs Brazilian Imports.
Consumer Producer Rivalry; The American Seafood Distributors, which represent consumers of shrimp farming, are interested in having the lowest cost. They are supporting the Brazilians and can potentially choose not to buy from the US based shrimp farmers.
Consumer – Consumer Rivalry; Is pretty low, since they have banded together to form the American Seafood Distributors.
Five Forces Analysis: Shrimp Farming Industry
Power of Buyers; High
Buyers have formed the American Seafood Distributors, which means they can ask negotiate in bulk and choose whether they buy