Ferrari Targets Successful Consumers

Kevin Crowder walked onto the famed Monza, Italy, race track, climbed into a Ferrari F2000 racer, and
circled the course with a Grand Prix champion. Mr. Crowder, a Texas businessman who earned millions
when he sold a software company he cofounded, isn’t himself a professional driver. He’s a customer of
one of Ferrari’s marketing programs: the F-1 Clienti program, under which Ferrari resurrects old race
cars that would otherwise be headed for the scrap heap. Instead, it sells them for $1 million or more,
along with the chance to drive them with a professional pit crew’s help.

Ferrari has long built its business around exclusivity. It limits production to around 4,500 to 5,000 cars a
year at around $180,000 and up. Some customers pay additional money to race these street cars against
fellow owners at company-sponsored Ferrari Challenge events. The F-1 Clienti program adds a superpremium
service by giving people a chance to drive the same Ferraris used in Formula One, a series of
auto races that are especially popular among Europeans.

The program gives customers “an experience they can’t get elsewhere,” says Ferrari CEO Dieter
Knechtel. Mr. Knechtel says that the “brand experience is very much related to the ownership
experience: It’s about driving and the experience of the car while doing it in a community of like-minded
people. This is why, we organise track days and tours in Italy with road tours in different countries, we
can organise almost any experience with the car—what we offer to our customers is often a ‘money can’t
buy’ experience.”

Critical Thinking Questions
1. For Mr. Crowder, the Ferrari is a specialty good. What kind of product would it be for you? Why?
2. Do you think that Ferrari has done a good job of building brand loyalty? Could Ford do the same
thing?

ANSWER BOTH QUESTIONS AND INCLUDE RESOURCES.DON'T LEAVE A QUESTION HANGING AROUND

he Roosevelt Company presently makes 27,000 units of a certain component each year for use on its production line.  The cost per unit for the component at this level of activity is as follows

Direct materials.................................$4.20

Direct Labor.....................................$12.00

Variable factory overhead................. $5.80

Fixed factory overhead......................$6.50

Roosevelt has received an offer from an outside supplier who is willing to provide 27,000 units of this component at a price of $25 per component.  Assume that if the component is purchased from the outside supplier, $35,100 of annual fixed factory overhead could be avoided and the facilities now being used to make the component could be rented to another company for $64,800 per year. If Roosevelt chooses to buy the component from the outside supplier under these circumstances, how much would annual net income increase or decrease by?

Consider the following LP formulation of the modified Dog Food example you learned in class (by adding gruel 5). The objective coefficients represent unit costs ($ per 16 oz) for the gruels. The RHS’s represent the nutrition requirements (measured in oz). MIN 4 G1 + 6 G2 + 3 G3 + 2 G4 + 5 G5 SUBJECT TO 2) 3 G1 + 5 G2 + 2 G3 + 3 G4 + 4 G5 >= 3 (Protein Req.) 3) 7 G1 + 4 G2 + 2 G3 + 8 G4 + 2 G5 >= 5 (Carbohydrate Req.) 4) 5 G1 + 6 G2 + 6 G3 + 2 G4 + 4 G5 >= 4 (Fat Req.) 5) G1 + G2 + G3 + G4 + G5 = 1 (Total %) END Below is the LINDO output of the problem. OBJECTIVE FUNCTION VALUE 1) 3.000000 VARIABLE VALUE REDUCED COST G1 0.000000 0.500000 G2 0.166667 0.000000 G3 0.333333 0.000000 G4 0.500000 0.000000 G5 0.000000 1.000000 ROW SLACK OR SURPLUS DUAL PRICES 2) 0.000000 -1.000000 3) 0.333333 0.000000 4) 0.000000 -0.500000 5) 0.000000 2.000000 RANGES IN WHICH THE BASIS IS UNCHANGED: OBJ COEFFICIENT RANGES VARIABLE CURRENT ALLOWABLE ALLOWABLE COEF INCREASE DECREASE G1 4.000000 INFINITY 0.500000 G2 6.000000 2.000000 3.000000 G3 3.000000 1.000000 3.000000 G4 2.000000 2.000000 INFINITY G5 5.000000 INFINITY 1.000000 RIGHTHAND SIDE RANGES ROW CURRENT ALLOWABLE ALLOWABLE RHS INCREASE DECREASE 2 3.000000 1.000000 0.500000 3 5.000000 0.333333 INFINITY 4 4.000000 0.250000 2.000000 5 1.000000 0.142857 0.038462 Consider yourself as the dog food producer. Answer the following questions based on the LP output:

1. (1pts) What is the minimum cost to make such dog food?

2. (3pts) The dog food buyer is willing to pay $0.5 more if you increase the fat by 1 oz in the 16 oz can of dog food and keep other nutrients unchanged. Do you want to take the offer? Explain.

3. (2pts) Among all gruels, which is least attractive to you? Explain.

4. (3pts) If the gruel 1 seller wants to offer you 10% discount on gruel 1, will you be interested in buying the gruel 1? If not, what would be the attractive price for gruel 1? Explain.

5. (4pts) If the unit price (cost) of gruel 2, gruel 3, and gruel 5 increase by $0.5, respectively, and that of gruel 4 decreases by $0.5, do you want to change the current dog food mix? Will the minimum cost for the dog food change? If so, by how much? Show your calculations.

6. (3pts) Would you be interested in buying gruel 6 that sells for $4 per 16 oz, which contains 3 oz of protein, 6 oz of carbohydrate, and 7 oz of fat? Show your calculations.

7. (4pts) If the dog food buyer requests to increase the protein level by 0.6 oz in exchange for reducing the fat level by 0.7 oz, would you take this offer? Explain and show your calculation.

1. An engineer suspects that the surface finish of a metal part is influenced by the feed rate and the depth of cut. He selects three feed rates and four depths of cut.

Feed Rate (in/min)                        0.20     0.25     0.30

Depth of Cut (in)                          0.15     0.18     0.20     0.25

(a) Design a complete factorial experiment for the experimenter.

(b) Now, suppose two machines (A and B) are used to complete the experiment. How would you change the experiments in (a) to avoid Block Effect?

Define and describe the following five concepts with at least 3 sentences: Title IX, established gender ideology, gender and fairness issues sports, trivialization of women's sports, and strategies to achieve gender equity

Provide an informed opinion about Shake Shack’s future quarterly earnings in an appealing and convincing format. Concretely, you should:

• Gather information relevant for providing an informed opinion about Shake Shack’s EPS for the first quarter of 2020 (January-March).
• Filter and weigh the information according to relevance. Some information is more relevant than others. New information is more up-to-date than old information; information from reputable sources tends to be more reliable than information from laymen; information that contradicts what a majority of others believe may be flawed, etc.
• Provide a clear estimate of Shake Shack’s expected Q1 2020 EPS.
• Write 2 paragraphs in which you present your findings and your opinion (no PowerPoint or visual aids required).
• Motivate your opinions. Why do you think analysts’ estimates may be too high (Coronavirus?) or too low (overreaction to Coronavirus?)? Are some analysts’ forecasts made before the outbreak hit and restaurants closed?

Some citizens complained to city council members that there should be equal protection under the law against the occurrence of crimes. The citizens argued that this equal protection should be interpreted as indicating that high-crime areas should have more police protection than low-crime areas. Therefore, police patrols and other methods for preventing crime (such as street lighting or cleaning up abandoned areas and buildings) should be used proportionately to crime occurrence.

         The city has been broken down into 20 geographic areas, each containing 5,050 residences. The police recognize that not all crimes and offenses are reported: people do not want to become involved, consider the offenses too small to report, are too embarrassed to make a police report, or do not take the time, among other reasons. Every month, because of this, the police are contacting by phone a random sample of 1,010 of the 5,050 residences for data on crime. (Respondents are guaranteed anonymity.) The 1,010 sampled from each area showed the following incidence of crime during the past month:

a. Determine P−

, S_p, UCL and LCL for a p chart of 95 percent confidence (at Z = 1.96). (Round your answers to 4 decimal places.)

b. What can you say about the process?

1. Which international strategy did Starbucks use to expand into Asia?

2. Which entry mode did Starbucks use to enter India? Why did it choose that mode of entry?

3. Do you think Starbucks will be successful in India?

1. Besides its impact on inventory management, what are the consequences of Just in time (JIT)? Explain the problem with a JIT system for something like Personal Protective Equipment in our current situation?

Please answer both parts.

Assume that your company wants to enter into a contract with a regional cell service provider. Your company wants to ensure that the contract is for a fixed term of 5 years, and cannot be terminated before that first 5-year term expires, and afterwards is renewable for 5-year terms unless terminated by one year's notice. TELUS does not want the parties to have the ability to terminate the agreement after only one year. The termination clause should only apply to the renewals, not the first five year period. Which of the following clauses will correctly capture what your company wants in the contract? (5 points) Answer: __ (a) "This Agreement shall continue in force for a period of five years from the date it is made, and thereafter for successive five-year terms, unless and until terminated by one year's notice in writing by either party." __ (b) "This Agreement shall continue in force for a period of five years from the date it is made and thereafter for successive five-year terms, unless and until terminated by one year's notice in writing by either party." __ (c) "This Agreement shall continue in force for a period of five years from the date it is made, and thereafter for successive five-year terms unless and until terminated by one year's notice in writing by either party." __ (d) "This Agreement shall continue in force for a period of five years from the date it is made and thereafter for successive five year terms unless and until terminated by one year's notice in writing by either party."