Annie Russell, a student at Tech, plans to open a hot dog stand inside Tech's football stadiumduring home games. There are seven home games scheduled for the upcoming season. She mustpay the Tech athletic department a vendor's fee of $3,000 for the season. Her stand and otherequipment will cost her $4,500 for the season. She estimates that each hot dog she sells will costher $0.35. She has talked to friends at other universities who sell hot dogs at games. Based on theirinformation and the athletic department's forecast that each game will sell out, she anticipates thatshe will sell approximately 2,000 hot dogs during each game.a. What price should she charge for a hot dog to break even?b. What factors might occur during the season that would alter the volume sold and thus thebreak-even price Annie might charge?c. What price would you suggest that Annie charge for a hot dog to provide her with a reasonableprofit while remaining competitive with other food vendors?

Given: Vendor's fee = $3000 Cost of equipment = $4500 Cost of each hotdog = 0.35 Sales = 2000 units

Answered: sne a. What price should she charge for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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