Hi,
Can someone help me answer this question? The answer is 1.6 but I'm not sure how they came to that.
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BCG Online Case Question - Gasoline Case
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It’s simple. The ask is to maximize the combined profits. Since margins are same, you need to figure out the price at which sales are maximized (cars per week x retail sales x average price). this price is 1.6
hope this helps
good luck
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With the information you provided we are only able to calculate the probitability of the retail operation, but not the profitability from fuel sales.
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??? It is necessary to use info from the previous question that gives both margins per liter and liters sold at different prices.
I think there is more information to it? Just examining the table on the slide the 40 extra cars would be the most profitable. I guess something about margins regarding the fuel prices?
Based on that isn't it (1.5 x 130 x 10) = 1950 for the 1.5 price and then (1.6 x 90 x 10) = 1440 for the 1.6 price? So how is 1.6 the better price?