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Price Comparison Study

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Pizza comparisons of Dominos & Little Caesars.

What is the best pizza deal in your area?
How do you conduct comparative shopping when different pizza stores have different size pans?
Are prices for some large pizzas for a particular store proportional to the amount of pizza for each size?
Does any combination of two pan sizes give a better buy than a larger pan size?
Is pizza available in any shape besides circles? If so, what are the advantages and disadvantages of these shapes from a marketing viewpoint?

From a consumer viewpoint, collect data from two of your favorite pizza restaurants in the following four areas:
1. Collect statistics in
pan sizes
prices
topping options

To begin your research, answer the following questions:
2. Compare cost per square inch of pizza for each pan size offered by a restaurant.
3. Compare cost per square inch of pizza with customer-chosen toppings versus store established combinations of toppings.
4. Compare cost per square inch of pizza for small, medium, and large pizzas for these two restaurants.

Note:Ã?
Use the following formulas:
Area of circle: which is pi x radius x radius
Area of a rectangle: which is length x width

Project Part II:
You often use the idea and practice of comparing cost and value before you actually shop in order to attain the best deal and pricing on products and services. Generally, you use this technique for buying occasional, big ticket items. Think about your process of comparison shopping and what you find to be the best approach for getting a good deal. Write a reflection that addresses your process of comparison shopping and how successful you have been.

In your reflection, you will address the following issues, so begin by reading through this list of questions and take notes on what you come up with.

Money saving deals
Think about the best deals you have had in the past and reflect on the factors that contributed to finding that deal.

How would you describe your overall ability to compare cost and value?

Process of comparing cost and value
What steps did you take to acquire the largest amount of savings?
What steps do you feel someone should take each day in order to save money while shopping?

Pros and cons of comparison shopping
The desire to save money seems like human nature. After all, who wants to spend more if they do not have to? Other than saving money, what other pros are associated with comparison shopping?
Finding money saving deals can be time consuming. This would be considered a con of comparison shopping. What other cons are associated with comparison shopping?

Now that you have thought through these questions and taken notes, it is time for you to draft your reflection. Every piece of writing should have an introduction, body, and conclusion. A good way to plan this particular reflective essay is to first write an introduction to the essay. Next, write at least three body paragraphs: one paragraph that focuses on your ability to comparison shop, one that focuses on your process of comparing cost and value, and one paragraph on what you feel are the pros and cons of comparison shopping. Finally, add a conclusion paragraph where you can reiterate an important point about how you saved money while comparison shopping and how this skill can aid you for the rest of your life.

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Solution Preview

Attached is the excel sheet used for computations and the word document

1. Collect statistics in pan sizes prices topping options
Dominoes pan size cost
small 10 7.49
Medium 12 8.99
Large 14 10.99
X-large 16 12.99
Artesian 13/9 rec 7.99

littleCaesar pan size cost
Medium 12 4.5
Large 14 5.99
extra large 16 7.5
giant 18 10

specialty pan size cost
12 7.5
14 8
16 11.49
18 13.49

2. Compare cost per square inch of pizza for each pan size offered by a restaurant.
Dominoes pan size cost area cost/insq
small 10 7.49 78.5398163 0.095366
Medium 12 8.99 113.097335 0.749167
Large 14 10.99 153.93804 0.785
X-large 16 12.99 201.06193 0.811875
Artesian 13/9 rec 7.99 78.5398163 0.101732

littleCaesar pan size cost area cost/insq
Medium 12 4.5 113.04 0.039809
Large 14 5.99 153.86 0.038931
extra large 16 7.5 200.96 0.037321
giant 18 10 254.34 0.039317

specialty pan size cost area cost/insq
...

Solution Summary

Comparison cost when buying pizza: Elements of deciding the best economical pizza in the area. Components considered area; size, shapes, and ingredients. Comparisons of advantages and disadvantages are discussed.

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Finance case study for Patsy's salon and day spa

When Patsy opened her full service salon and day spa three years ago, she knew that she would have to make some difficult choices regarding the hiring and firing of qualified professionals such as cosmetologists, estheticians, nail technicians and massage therapists. However, she was confident that her salon management training at Chic
University coupled with her industry experience as a stylist would serve her well.
And serve her well they certainly did! Within three years of starting her own business, and after a few setbacks, she had managed to assemble a team of 10 salon professionals who were all extremely motivated, people-oriented, and driven individuals who worked hard at retaining their clients and drumming up retail sales. Of course, Patsy had put in place an incentive plan, which the stylists found to be challenging, yet lucrative. Patsy's salon revenues had grown significantly each year to their current annual level of $500,000. On average, the salon serviced about 40 customers per day with an average ticket of $50.

However, over the past year or so a number of new salons and nail spas had opened up in the city. Competition had become much more severe and customers were being swayed by numerous discount coupons. Patsy was well aware that her current sales growth rate of 10% would not continue for very long.

At the suggestion of some of her regular clients, she decided to explore the possibility of expanding her service offerings to include tanning booths. She figured that such an addition would complement her current salon business by offering customers the opportunity to come in for about 15-30 minutes and have a worthwhile tanning experience or better still to enjoy a relaxing tan instead of waiting out in the lounge.

As Patsy began exploring the various costs and investments required, she realized that she had very little knowledge about the tanning business. What appealed to her the most was that the revenues from the tanning business would be all hers to keep unlike the other salon services where she paid the salon professional a commission of up to 50% of the revenue generated from the services rendered. What was most confusing to Patsy was whether she should go in for the tanning dome unit or the relatively cheaper tanning bed.

"Call up that toll free number that's listed on the Sun-Quest Catalog", said her ever-resourceful husband, Alan, who worked as a sales representative for a chemical company. "It always works for me," he added. After many hours of agonizing over the issue, Patsy finally gave in and made the call.

The salesman, Mike, who answered the call, was extremely helpful, courteous, and convincing. "Tanning is a great complement to a Salon and Spa," he said. "We have shipped many units to salons all over the country, and they seem to be doing pretty well."

"Let's say I do start the tanning service at my salon, Mike, should I go in for the less expensive tanning bed or the more expensive tanning dome?" asked Patsy, eager to sort out her dilemma. "Well," responded Mike, "Each unit has its own pros and cons. The bed costs considerably less than the dome, but it takes longer for an equivalent tan per session. The dome on the other hand, costs more, but it does the job faster, provides for a complete body and facial tan, and lasts longer."

"Do you have a comparison chart showing the approximate costs, features, and revenue potential of each option, Mike?" asked Patsy. "Absolutely," said Mike. "I would be happy to email you a copy right now, if you like." "That would be great!" said Patsy, "It would certainly help me make an informed decision. As you can see, Mike, I really want to figure out which of these two units is Too Hot To Handle!"

1. Develop operating cash flow forecasts for the relevant lives of each type of tanning equipment using 100% (Best case), 80% (Most Likely Case), and 50% (Worst Case) occupancy estimates for each tanning option. Assume straight line depreciation and a tax rate of 30%.

2. Calculate and comment upon the accounting, cash, and financial break-even sales for the dome unit and the tanning bed unit respectively.

3. Calculate the net present value, payback period, and the traditional IRR for each tanning option under the various scenarios. What do the decision rules indicate?

4. Can Patsy evaluate this business project by assuming just a onetime purchase? Why or why not? What other evaluation methods should Patsy use?

5. If you decide to use the replacement chain method, how do the calculation and decision change?

6. What are some externalities, side effects, and other relevant issues that could affect the decision?

7. Based upon your analysis, which of the two units is "Too Hot to Handle?" Why?

(See attachment for exhibits and full problem)

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