Fatima Abdel-GwadMoncerrat Avila

Omar Castellanos

Client Needs

• PSA wants to know if they should re-enter the US with GM motors

PSA Peugeot Citroen needs:• Detailed explanation of vehicle model and chosen range • Cost breakdown for each model including standard and

individual option costs • Graphical representation showing final recommended prices

for each model based on: • Potential sales prices based on a range of 4 to 8 percent profit

above cost • Maximum profit point based on estimated consumer response

Peugeot 207 3DR

• Economy Range• Estimated Costs (Europe) – (£9,995.00)• Estimated Costs (America) – ($15,766.63)• 6% Profit

Cost and Revenue FunctionC(x)=17,624.22x+1,000,000

R(x)=-x2 +112,260x

y

x

Amou

nt o

f M

oney

(in

thou

sand

s)

Amount of Cars (in thousands)

Profit Function

P(x)=-x2 +95.038x-1000

Maximum Point: (47.519, 1258.005)y

x

Amou

nt o

f Mon

ey

(in th

ousa

nds)

Amount of Cars (in thousands)

Peugeot 207 CC

• Mid-Range• Estimated Costs (Europe) - £16,645.00 • Estimated Costs (America) - $26,256.70• 8% profit percentage

Cost and Revenue Function

C(X)=29.358x+1000

R(X)=-x2+102.11

y

x

Amou

nt o

f Mon

ey

(in th

ousa

nds)

Amount of Cars (in thousands)

Profit Function

P(X)=-x2 +72.752x-1000

x

y

Maximum Point: (36.376, 323.31)Amou

nt o

f Mon

ey

(in th

ousa

nds)

Amount of Cars (in thousands)

Peugeot RCZ

• Luxury• Estimated Costs (Europe): £20679.75• Estimated Costs (America): $34330.50• 5% Profit

Cost and Revenue Function

C(x)=37049.84x+1000000

R(x)=-x^2+94180

y

xAmount of Cars (in thousands)

Amou

nt o

f Mon

ey

(in th

ousa

nds)

Profit Function

P(x)=-x^2+131229.84x+1000000

Maximum

x

(65, 3304)

Amou

nt o

f Mon

ey

(in th

ousa

nds)

Amount of Cars (in thousands)

Solution

• Economy makes a maximum profit at 47,519 cars of $1,258,005

• Mid-Range makes a maximum profit at 36,376 cars of $323,310

• Luxury makes a maximum profit of $3,304,000 at 65,000 cars

Suggestions to PSA Peugeot Citroen

• Enter country with the Economy, Mid-Range and Luxury cars; you will make a profit.