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Here are 2 examples of calculating the profit of a round:
Example 1:
o your retail price = $20.00 / unit
o purchasing price = $7.50 / unit
o your initial order quantity = 50 units
o your second order quantity = 40 units
o change fee = $20
o demand realized = 20 units
Profit = $20.00 * 20 units [units sold = Minimum of demand and order quantity]
- $7.50 * 40 units [order quantity] - $20.00 [change fee]
= $80.00
Example 2:
o prices of Example 1 apply here
o your initial order quantity = 50 units
o you do not change your initial order quantity, so no change fee is applied
o demand realized = 100 units
Profit = $20.00 * 50 units [units sold = Minimum of demand and order quantity]
- $7.50 * 50 units [order quantity]
= $625.00
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