Striates Price 21. Contribution is calculated based on price and costs. Often we treat these variables as fixed. What are the implications of treating uncertain variables as fixed? Some of the implications of uncertain variables could concern payroll. You will need to have a baseline of how much you will pay each week. Someone can be sick and you don't replace the hours or you replace the hours with another employee who has a salary. Running an ad in the newspaper that you have changed to the format that you want to put in the newspaper that would change the price either way, it could be more or less. If you have a delivery service, the gas price would change from week to week. You will have to budget a little high if you want to get by.2. What are examples of conflicting motivations that could lead well-intentioned managers to undermine a stated pricing strategy? Some conflicts could be personal when someone comes into the store and the manager knows and offers them a good price reduction, which could turn into more conflicting motivations. more than once and continue. There could also be a calculation between store managers who work for the same company. You can reduce the price so that customers come to your store and add volume to your store, but this hurts the store's profit margin. If a store manager has an ego problem of always wanting to be the best and showing everyone that he is. the best. He can do whatever it takes to feel better, even if he doesn't know it or believe it. Striates 3 price...... middle of paper ...... the mental cost of doing business is a variable and may This will not be determined until the company has brought it to market to see if the item will sell and generate revenue. It all depends on the company's overhead costs. If said company has two thousand dollars in overhead, the company must set prices. to cover overhead costs needed for daily expenses. If the company maintains the same pricing strategies and does not generate enough revenue, then it will have to close its doors or make drastic changes by liquidating some assets in order to free up cash to stay in business. Works Cited, Chapter 10. (nd). In Pricing Strategy and Tactics (p. 183). (Reprinted from The StrategyAnd Tactics of Pricing, Fifth ed., p. 183, by TT Nagle & J. Zale, 1987, New Jersey: PrenticeHall)In Strategy and Tactics of Pricing