Baldwin bicycle hi valu

Baldwin bicycle company chegg

Market scenario Bicycle boom has flattened out. Estimated bikes a year. They want to purchase the Bikes at a lower rate from BBCs present wholesale price and they also want to price the bike lower than the existing models of BBC. Not only that, with Challenger bikes, Baldwin will be able to enter and provide for the mainstream market and be able to sell in a larger scale. They also want the bikes to be somewhat different in appearance from the other BBC models. What is the overall impact on the company in terms of: a. Poor economy has caused Baldwins sales volume to fall the past two years. Hi-Valu to hold the consignment in its own warehouse but withhold the payment until delivery to a specific store. However, we should be able to recognize sensitivity analysis to other assumptions that might affect this decision in the long run if the Hi-Valu volume demand would increase after the 3 years contract, additional sales losses in case current dealers drop the Baldwin Bicycle Company line of bicycles and so on. Assumptions Materials: 2 months supply Work in progress: 1, bikes, half completed Finished goals: bikes 6. Contract would then be automatically extended on year-to-year basis, unless one party gave the other at least six months notice that it did not wish to extend the contract. Hi-Valu would purchase from Baldwin and must pay for it withing 30 days. First, it has to have ready access to large inventory of bicycles by having these in their regional warehouses because Hi-Valu is having trouble in predicting it sales, both by store and by month. Knott is the Hi-Valus buyer for sporting goods.

Baldwin Bicycle Company have to decide whether to accept or reject its offer. Contract would then be automatically extended on year-to-year basis, unless one party gave the other at least six months notice that it did not wish to extend the contract.

Objective To understand the effects of accepting this proposal on the company.

what is the expected added profit from the challenger line

Suzanne Leister is the Vice President Marketing of the company. Analysis of Alternatives and Recommendations………………………………………10 VI. Expected Sales over the next three years will be about bikes a year.

Bicycle case study

In order to come up with the right pricing, one should be able to identify the relevant and irrelevant cost of the company. What is the expected profit from the Challenger line? Not only that, with Challenger bikes, Baldwin will be able to enter and provide for the mainstream market and be able to sell in a larger scale. However, we should be able to recognize sensitivity analysis to other assumptions that might affect this decision in the long run if the Hi-Valu volume demand would increase after the 3 years contract, additional sales losses in case current dealers drop the Baldwin Bicycle Company line of bicycles and so on. Problem Statement…………………………………………………………………………. Expected Sales over the next three years will be about bikes a year. Page 9 As the chapter tackles about short-run decision, Baldwin Bicycle Company should accept the proposal of Hi-Valu due to additional profit that they will achieve. Market scenario Bicycle boom has flattened out. Page 6 3. Background Information………………………………………………………………….. Analysis of Alternatives and Recommendations………………………………………10 VI. Hi-Valu to hold the consignment in its own warehouse but withhold the payment until delivery to a specific store. Estimated bikes a year.

In the long run, Baldwin will benefit not only in profit, but it will also learn the trends, movements and demands of the market.

Assumptions Materials: 2 months supply Work in progress: 1, bikes, half completed Finished goals: bikes 6.

Baldwin bicycle hi valu

The gross margin represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services it sells. Baldwin Bicycle Company have to decide whether to accept or reject its offer. Initially the agreement is for three years. Hi-Valu would agree to take title of any of the bicycle that has been in any of its store for 4 months. Suzanne Leister is the Vice President Marketing of the company. Frame and mechanical components of the bicycle will remain. Hi-Valu would pay for the bike within 30 days of its purchase. However, we should be able to recognize sensitivity analysis to other assumptions that might affect this decision in the long run if the Hi-Valu volume demand would increase after the 3 years contract, additional sales losses in case current dealers drop the Baldwin Bicycle Company line of bicycles and so on. You are on page 1of 24 Search inside document Background Baldwin Bicycle Company Baldwin Bicycle Company has been in the cycle manufacturing business for last 40 Years.

Hi-Valu to hold the consignment in its own warehouse but withhold the payment until delivery to a specific store. Sales were mainly through independently owned toy stores and bicycle shops.

What are the additional assets and related carrying costs?

Estimated bikes a year. Baldwin Bicycle Company have to decide whether to accept or reject its offer. Asset related cost annual variable cost Per tax cost of funds Answer to Case Questions…………………………………………………………… V. What is the expected impact of cannibalization of existing sales? Problem Statement…………………………………………………………………………. What are the additional assets and related carrying costs? Background Information………………………………………………………………….. Poor economy has caused Baldwins sales volume to fall the past two years. Hi-Valu would pay for the bike within 30 days of its purchase. One should know how to execute the right procedure in allocating the right price of a product by knowing the mark up costs, differential costs, sunk costs, and other related types. In , Company has 10 models ranging from a small beginner's model with training wheels to a deluxe speed adults' model. If it is going to take title to the bicycles that have been stored in one of its warehouses for four months, Hi-Valu must pay again within 30 days. Its sales volume had grown to the extent that it was beginning to add house brand merchandise to the product line of several of its departments. Summary of Findings………………………………………………………………………

Its sales volume had grown to the extent that it was beginning to add house brand merchandise to the product line of several of its departments. Initially the agreement is for three years.

what is the relevant cost of manufacturing a challenger bike

Page 9 As the chapter tackles about short-run decision, Baldwin Bicycle Company should accept the proposal of Hi-Valu due to additional profit that they will achieve.

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Baldwin Bicycle Case