Reference no: EM132592710

Seven years ago, you started a cross-town delivery service. The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists. You have two types of service. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10 lbs. As a way to introduce the new package service when you implemented the small package service you charged the same price for packages as parcels. You are now wondering if you should charge different prices for the parcel and package service. Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? Combined Parcels & Packages Price Parcels and Packages TR MR TC MC MR-MC Profit 100 50 1600 90 120 2300 80 190 3000 70 260 3700 60 330 4400 50 400 5100 40 470 5800 30 540 6500 20 610 7200 10 680 7900

The Parcels Market Price Parcels and Packages TR MR TC MC MR-MC Profit 100 50 1600 90 120 2300 80 190 3000 70 260 3700 60 330 4400 50 400 5100 40 470 5800 30 540 6500 20 610 7200 10 680 7900 Price Parcels TR MR TC MC MR-MC Profit 100 0 1150 90 50 1650 80 100 2150 70 150 2650 60 200 3150 50 250 3650 40 300 4150 30 350 4650 20 400 5150 10 450 5650

The Packages Market What is the best pricing strategy? Demonstrate the difference in the profit from each strategy. Price Packages TR MR TC MC MR-MC Profit 100 50 450 90 70 650 80 90 850 70 110 1050 60 130 1250 50 150 1450 40 170 1650 30 190 1850 20 210 2050 10 230 2250