Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 4P

A restaurant is considering adding fresh brook trout to its menu. Customers would have the choice of catching their own trout from a simulated mountain stream or simply asking the waiter to net the trout for them. Operating the stream would require $10,600 in fixed costs per year. Variable costs are estimated to be $6.70 per trout. The firm wants to break even if 800 trout dinners are sold per year. What should be the price of the new item?

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A restaurant is considering adding fresh brook trout to its menu. Customers would have the choice of catching their own trout from a simulated mountain stream or simply asking the waiter to net the trout for them. Operating the stream would require $10,600 in fixed costs per year. Variable costs are estimated to be $6.70 per trout. The firm wants to break even if 800 trout dinners are sold per year. What should be the price of the new item?
Suppose that you have a service business such as house painting. Describe how you would use cost-plus pricing in developing an estimate for a potential customer.
You are the Operations Manager of the UBSC which has an artificial soccer pitch. The club closes at 4 p.m. on Saturday. A community soccer club approaches you and asks to hire it from 4 p.m. until 6 p.m. If the pitch is open for public use you must provide staff, which will cost $30 per hour. What price should you charge for the hire and what are your business considerations?
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