What price should natbike charge each segment

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Reference no: EM133353439

Question: NatBike, a bicycle manufacturer, has identified two customer segments; one segment prefers a customized bicycle and is willing to pay a higher price whereas the other is willing to take a standardized bicycle but is more price sensitive.

Assume the customized bicycle costs $300 to manufacture, whereas a standardized bicycle costs $200 to manufacture.

Demand from the customized segment has a demand curve of d1 = 20,000 - 10p1 and demand from the standardized segment has a demand curve of d2 = 40,000 - 30p2.

Problem 1 (3 pts): Construct an optimization model to determine what price should NatBike charge each segment if there is no capacity constraint.

Problem 2 (2 pts): What price should NatBike charge each segment if the total available capacity is 20,000 bicycles?

Reference no: EM133353439

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