Module 03 Course Project – Special Order Pricing

Module 03 Course Project – Special Order Pricing

Module 03 Course Project – Special Order Pricing

Module 03 Course Project – Special Order Pricing

There are various challenges that face new businesses when they venture in the markets. The issues include being uncertain about the future, lack of relevant technology to boost their output, inadequate financial ability, failure to monitor the performance of the firm and high level of competition (Hull, 2014). These have been among the challenges that face my cookie company. This is because the firm is growing but not as rapidly as I would like. Getting frequent orders has been a big challenge over the past few months but during a recent conversation with the owner of a local car dealership, he offered to purchase 500 cookies for a special event in the community. The content of this paper will discuss the properties of this deal, the cost evaluation of the deal and make a conclusion of whether to take or leave it.

The owner insisted that the cookies to be displayed in the form of car and wanted the dealership logo on each of the cookies. He agreed that the cookies could be the firm`s signature flavor. This would act as a form of advertisement thus promoting my firm and the local car dealership. Promoting the company`s brand is always the best way of getting to spread news to the consumers. Customers need to be aware of the every product being availed by a firm for them to make sound decisions when making purchases (Wheelen, Hunge, Hoffman & Bamford, 2017). Having the opportunity to work with a local car dealer will expand the business as other people will get to buy the cookies. Also, participating in the special event would welcome more prospective buyers of the cookies. Most members of the community will be present for the event as well as other managers in various firms. This form of promoting our cookies will generate more sales in the market thus generating more profits.

There is always the need of evaluating every deal that a firm gets. This eliminates the chances of making the wrong choice since rushing into making decisions without proper evaluations would lead to losses. Many firms have adopted the nature of following the profits instead of making a conclusive review of the deal in question (Scarborough, 2016). Every deal has its merits and demerits thus the owners have a duty of making deep evaluations of the deals to come to a reasonable conclusion. The display of the cookies will cost $200 to create and the logo of each cookie will be $.03. Making the cookies will require the employees to work overtime because it is a rush order. The firm will be required to deliver the cookies in the upcoming special event and a napkin for each cookie is also a necessity.

The costs of the deal will be as follows.

Item (s) Cost ($)
Display 200
Logo .03X500=15
Napkins .03X500=15
Cookies .95X500=475
Totals 705

If I decide to charge $1500, the local car dealer will pay 85% which is $1275. This will be enough to cater for the other miscellaneous items such as the transportation of the cookies and catering for the overtime sessions that the employees will engage in preparing the cookies. The realized profits will enable the firm to remain in business hence there will be positive progress.

Judging by the revenues and the costs involved in this affair, the deal will provide the company with reasonable profits. The deal will not only lead to profits but also get the name of the company out there in the public. The deal will play a crucial role in fetching more business opportunities for the firm. I will take the job at the reduced price for it has many advantages that will uplift the company.

References

· Hull, J. C. (2014). The evaluation of risk in business investment. Elsevier.

· Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management. Pearson.

· Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.