Revenue Maximization for a Sporting Goods Store
Calculating the Problem
620 cans will maximize the transaction. Calculating the problem:
The given parameters are:
- The unit rate of 20 cans is $2.40
- The unit rate of cans in excess of 20 is $0.02
Let the number of cans be x.
So, the function is represented as:
f(x) = 2.40 × 20 + 0.02 × (x - 20)
This gives:
f(x) = 48 + 0.02x - 0.4
The limit is 60.
So, we have:
60 = 48 + 0.02x - 0.4
Collect like terms:
0.02x = 60 - 48 + 0.4
0.02x = 12.4
x = 620
Hence, 620 cans will maximize the transaction.
What's Revenue for a Business?
Revenue refers to the total earnings a company generates through its core operations like sales of products or services. Profit computations come after subtracting any expenses, such as discounts and returns.Total Earnings:
Total earnings mean pay for regular hours, overtime, premium pay, shift differential, retroactive pay adjustments, call-ins, Saturday and Sunday premiums, and trade training.
Total earnings mean all salaries, wages, commission, and other payments for services rendered under the worker’s wage agreement with the employer.
The question is incomplete. Missing part is: A sporting goods store sells tennis balls for $2.40 per can when a quantity up to 20 cans is purchased. For each can above 20 purchased, the price per can is reduced by $0.02, with a limit of 60 cans. How many cans of tennis balls sold in one transaction will maximize the revenue for the store?
How can a business maximize its revenue?
A business can maximize its revenue by implementing effective pricing strategies, optimizing its product offerings, expanding its customer base, and reducing expenses to increase profitability.