Question

1. Assume that you would start a business of having a hot dog truck at KPU Surrey campus

a. Identify your fixed costs and variable costs

b. Identify pricing tactic you would deploy?

c. Decide on a selling price for your hot dog (consider you have only one size)

d. what is your mark up?

e. Based on your selling price, what is your contribution?

f. How many hot dogs do you need to sell to make a profit per month? (Do a Break-even analysis)

g. What should be your daily average sales quantity (assume you open 20 days per month)

h. What are things you could do to lower your break-even sales quantity?

i. What are some things you could do to make sure you meet your break-even point as quickly as possible?

j. Identify some of your pull strategies?

k. What type of promotions would you do to improve your sales?

(Full marks will be awarded for using realistic pricing and practical approaches)

2. Based on your promotion decided, develop your promotional material? Use any appropriate promotional media and marks awarded based on creativity.

Answer 1

Answer 1-

a) Fixed cost would include the cost of buying the truck and the cost of different types of gear, for example, gas, stove, and utensils.

Variable cost would incorporate the cost of crude materials, for example, vegetables, bread and different elements of the Hotdog.

b) Pricing would be as indicated by the moderateness of the objective clients and the serious prices that are being charged by the rivals in the market.

Tactics would incorporate pricing the item that would help in recouping the cost of creation of the item and the normal profit.

c) Selling price for hotdog would be $2. Pricing the item for get one on one offer whose price would be marginally higher than a solitary item however lesser than the 2 bits of hotdog.

d) Mark up price would be $2.5 relying upon the cost of making, anticipated profit and overhead cost.

e) The contribution most definitely ought to be not more than $1.5 in order to make the profit of atleast $0.5.

f) In request to make the profit per month, I have to sell atleast 5000 hotdogs in order to make the profit of atleast $2500 as per the computation of contribution if "e".

g) Daily average deals to sell 5000 hotdogs in 20 days ought to be (5000/20) 250 hotdogs on an average per day.

h) Increasing the quantity of clients would be one of the answers for bring down the break even deals quantity. As the quantity of clients will build, break even quantity would be brought down after certain period of time.

Different things that are expected to guarantee in order to diminish the breakeven point is lessening the measure of fixed cost and variable cost and expanding contribution edge.

I) Selling more number of items by expanding the quantity of clients would help in accomplishing the breakeven point in the underlying days as it would help in meeting the cost required for making hotdog.

j) Some of the pull system would incorporate giving reciprocal items along the hotdog at lesser cost, furnishing hotdog with one free on one in order to draw in clients.

k) In request to improve the business, I would do promoting, open connection and direct marketing.