Profit Maximization through Strategic Sales: A Detailed Case Study
An intriguing case study in the domain of business and economics involves a scenario where Anu, a seller, achieves significant profit by strategically selling buttons at different price points. This article delves into Anu's transaction, breaking down the cost, selling price, and profit to highlight the importance of apt pricing strategies and efficient business models.
Background of Anu's Transaction
Anu is faced with a specific transaction involving a total of 300 buttons. The sale of these buttons is structured in a way that maximizes profit through efficient pricing and sales strategy. Initially, Anu purchases these buttons at a cost price (CP) of Rs. 6 for a set of 3 buttons. The subsequent sales are conducted at a higher price point, achieving a total profit of Rs. 300.
Understanding the Cost Price and Selling Price
To better understand the context and the impact of her sales strategy, we need to dissect the cost and selling prices involved in each transaction.
Cost Price (CP)
The cost price of the buttons is Rs. 6 for every 3 buttons. This implies that the cost per button is:
Cost price of 1 button (CP) 6 / 3 Rs. 2
Selling Price (SP)
Interestingly, Anu decides to sell these buttons in a way that benefits her financially. She sells 5 buttons at a selling price (SP) of Rs. 15. Therefore, the selling price per button (SP) can be calculated as:
Selling price of 1 button (SP) 15 / 5 Rs. 3
Profit Calculation per Set of 5 Buttons
The profit made per set of 5 buttons is calculated as the difference between the selling price and the cost price of these buttons:
Profit for 5 buttons Selling price of 5 buttons - Cost price of 5 buttons
Given that:
Cost of 5 buttons (CP) 5 * 2 Rs. 10Selling price of 5 buttons (SP) 15
Therefore:
Profit for 5 buttons 15 - 10 Rs. 5Total Profit and Number of Buttons Sold
Anu’s overall profit is reported as Rs. 300. To determine the total number of buttons she sold, we use the profit per set and relate it to the total profit:
Total profit Profit per set of 5 buttons * Number of sets of 5 buttons sold
300 5 * Number of sets of 5 buttons soldNumber of sets of 5 buttons sold 300 / 5 60
Total buttons sold 60 * 5 300
Conclusion
The case study of Anu's transaction exemplifies the effective use of strategic sales and pricing strategies to achieve significant profit. Through careful analysis of the cost and selling prices, Anu was able to maximize her profit when selling 300 buttons. This approach can serve as a valuable lesson in business and economics, highlighting the importance of understanding the relationship between cost price, selling price, and profit margins.
References
1. Anu's transaction details and calculations.
2. Cost and selling price calculations.
3. Profit maximization strategies in business and economics.