Question

Questions 5 & 6

5. The individual who is organizing the charity's fundraising event has indicated that he has already received a bid just under $30 from another catering company. Do you think Chavez should bid below her normal $31 per guest price for the charity event? Why or why not? 6. If a lower price is considered what would be one advantage and one disadvantage of such a decision?

additional information

Answer 1

157 158 160 150 5. The individual who is organizing the client's fund-raising event has indicated that he has 151 already received a bid under DH30 from another catering company. Do you think Chavez 152 should bid below her normal DH 31 per guest price for the charity event? Why? 153 154 Since the organizer has already received a bid for under $30, bidding at $31 will not get the order. 155 The variable cost is $21.97 per guest and so there is scope to bid at a price less than $30. Doing this party may also lead to more orders for Chavez. Therefore Chavez has to decide the price between $21.97 and $30 which will get the order We would favor bidding slightly less than $30 to get the contract. Any bid above $22 However, the price need not be publicized and the lower price could be justified to future clients because this is a charity event. 159 Another possibility would be for Maria to maintain her normal price but he should provide additional services to the customers at no additional cost to the customer. 161 Food and beverages 15 163 Labor (0.5 *$10.00 ) Overhead (0.5 *$3.95) 1.97 Total variable cost per guest 21.97 166 Add Markup 3.30 167 Price Bid Per Guest 25.27 168 169 6) If a Lower Price is considered what would be one advantage and one disadvantage of 170 such a decision? 171 172 If a lower bid is considered the advantage is that it may start receiving more orders. 173 The disadvantage is that it will reduce the profit per guest. 174 5 164 165