Simon Pie Co.

--Weekly Profit Model

Decision Variable:
Pie Price $ 8
Pie Demanded & Sold(000's per week) 16

Parameters:
Unit Pie Processing Cost ( per pie) $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48
Unit Cost, Dough ( per pie) $ 0.30
Fixed Cost (000's per week) $ 12

Financial Results (000's per week)

Revenue $ 128
Processing Cost $ 33
Ingredients Cost $ 60
Overhead Cost $ 12
Total Cost $ 105
Profit (before tax) $ 23
Simon Pie Co.--Weekly Profit Model
Decision Variable:
Pie Price $ 7.00
Pie Demanded & Sold(000's per week) 20

Parameters:
Unit Pie Processing Cost ( per pie) $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48
Unit Cost, Dough ( per pie) $ 0.30
Fixed Cost (000's per week) $ 12.00

Financial Results (000's per week)

Revenue $ 140
Processing Cost $ 41
Ingredients Cost $ 76
Overhead Cost $ 12
Total Cost $ 129
Profit (before tax) $ 11
Simon Pie Co.--Weekly Profit Model
Decision Variable:
Pie Price $ 9.00
Pie Demanded & Sold(000's per week) 12

Parameters:
Unit Pie Processing Cost ( per pie) $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48
Unit Cost, Dough ( per pie) $ 0.30
Fixed Cost (000's per week) $ 12.00

Financial Results (000's per week)

Revenue $ 108
Processing Cost $ 25
Ingredients Cost $ 45
Overhead Cost $ 12
Total Cost $ 82
Profit (before tax) $ 26
Simon Pie Co.--Weekly Profit Model
Decision Variable:
Pie Price $ 8
Parameters:
Unit Pie Processing Cost ( per pie) $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48
Unit Cost, Dough ( per pie) $ 0.30
Fixed Cost (000's per week) $ 12
Equation coefficients
Pie Demand equation
Intercept 48
Slope (linear coefficient) -4
Physical results(000's per week)
Pies Demanded & sold 16.00
Financial Results ($000's per week)
Revenue $ 128
Processing Cost $ 33
Ingredients Cost $ 60
Overhead Cost $ 12
Total Cost $ 105
Profit (before tax) $ 22.7
Simon Pie Co.--Weekly Profit Model
Decision Variable:
Pie Price $ 6.00 $ 7.00 $ 8.00 $ 9.00 $ 9.50 $ 10.00
Parameters:
Unit Pie Processing Cost ( per pie) $ 2.05 $ 2.05 $ 2.05 $ 2.05 $ 2.05 $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48 $ 3.48 $ 3.48 $ 3.48 $ 3.48 $ 3.48
Unit Cost, Dough ( per pie) $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30
Fixed Cost (000's per week) $ 12 $ 12 $ 12 $ 12 $ 12 $ 12
Equation coefficients
Pie Demand equation
Intercept 48 48 48 48 48 48
Slope (linear coefficient) -4 -4 -4 -4 -4 -4
Physical results(000's per week)
Pies Demanded & sold 24.0 20.0 16.0 12.0 10.0 8.0
Financial Results ($000's per week)
Revenue $ 144 $ 140 $ 128 $ 108 $ 95 $ 80
Processing Cost $ 49 $ 41 $ 33 $ 25 $ 21 $ 16
Ingredients Cost $ 91 $ 76 $ 60 $ 45 $ 38 $ 30
Overhead Cost $ 12 $ 12 $ 12 $ 12 $ 12 $ 12
Total Cost $ 152 $ 129 $ 105 $ 82 $ 70 $ 59
Profit (before tax) -7.92 $ 11.4 $ 22.7 $ 26.0 $ 24.7 $ 21.4
$ 11.00

$ 2.05
$ 3.48
$ 0.30
$ 12

48
-4

4.0

$ 44
$ 8
$ 15
$ 12
$ 35
$ 8.7
Simon Pie Co.--Weekly Profit Model
Decision Variable: Base case
% change from $ 9,00 Base price 85% 90% 95% 100% 105% 110%
Pie Price $ 7.65 $ 8.10 $ 8.55 $9.00 $ 9.45 $ 9.90
Parameters
Unit Pie Processing Cost ( per pie) $ 2.05 $ 2.05 $ 2.05 $ 2.05 $ 2.05 $ 2.05
Unit Cost , Fruit Filling ( per pie) $ 3.48 $ 3.48 $ 3.48 $ 3.48 $ 3.48 $ 3.48
Unit Cost, Dough ( per pie) $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30
Fixed Cost (000's per week) $ 12 $ 12 $ 12 $ 12 $ 12 $ 12
Equation coefficients
pie demand equation
Intercept 48 48 48 48 48 48
Slope (Linear Coefficient) -4 -4 -4 -4 -4 -4
Physical results(000's per week)
Pies Demanded & sold 17.4 15.6 13.8 12 10.2 8.4
% change from Base demand 45% 30% 15% 100% -15% -30%
Financial Results ($000's per week)
Revenue $ 133 $ 126 $ 118 $ 108 $ 96 $ 83
Processing Cost $ 36 $ 32 $ 28 $ 25 $ 21 $ 17
Ingredients Cost $ 66 $ 59 $ 52 $ 45 $ 39 $ 32
Overhead Cost $ 12 $ 12 $ 12 $ 12 $ 12 $ 12
Total Cost $ 113.4 $ 102.9 $ 92.5 $ 82.0 $ 71.5 $ 61.0
Profit (before tax) $ 19.67 $ 23.41 $ 25.54 $ 26.04 $ 24.92 $ 22.19
% change from Base Profit -24.5% -10.1% -1.9% 100.0% -4.3% -14.8%
 115%
$ 10.35

$ 2.05
$ 3.48
$ 0.30
$ 12

48
-4

6.6
-45%

$ 68
$ 14
$ 25
$ 12
$ 50.5
$ 17.83
-31.5%
 Pie Price 7.65 8.10 8.55 9.00 9.45 9.90
Revenue 133 126 118 108 96 83
Processing Cost 36 32 28 25 21 17
Ingredients Cost 66 59 52 45 39 32
Overhead Cost 12 12 12 12 12 12
Total Cost 113 103 92 82 71 61
Profit (before tax) 20 23 26 26 25 22

Chart Title
Revenue Proces s i ng Cost Ingredients Cost
Tota l Cost Profit (before tax)
140

120

100

80

60

40

20

0
7.65 8.10 8.55 9.00 9.45 9.90
 10.35
68
14
25
12
50
18

Ingredients Cost

9.45 9.90 10.35