You are to assume the role of the general manager at a local Care More drugstore. The district manager wants you to decide how to price a private label product and explain reasons for the pricing decision.
There is currently a nationwide shortage on disposable baby diapers. The popular name brands had to slow manufacturing due to a shortage of crucial materials needed. The shortage has led to panic buying and great concern among caretakers.
Care More sells a private label brand of baby diapers. Since it is a private label brand, Care More can price the product above or below the manufacturer advised pricing. Currently, a 30-pack of Care More private label baby diapers is $7.00, in comparison, a name brand package of 30 diapers is priced at $15.00.
All retailers in town have little to no diapers in stock. Care More will be receiving a shipment of private label brand diapers in tomorrow. The district manager is allowing you to determine if the price of each package should be kept at $7.00 or if the price should be changed. The district manager wants you to analyze the situation, set a price and explain reasons for the pricing decision.
