Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

If Mr. Stephen wanted a long-term commitment, and not a one-time-only special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains the same?
A) $650
B) $790
C) $869
D) $370

Question

Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

If Mr. Stephen wanted a long-term commitment, and not a one-time-only special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains the same?
A) $650 
B) $790 
C) $869 
D) $370

Quizplus · Accepted Answer

Long-run pricing is a strategic decision designed to build long-run relationships with customers based on stable and predictable prices. Therefore, the most likely long-term price = $869.

Golden Generator Supply Is Approached by Mr