Question description

 

give me a comment on this discussion, about four sentences

‘Set your Price’ Approach for Heritage Doll

 

Introduction

Risk management is one of the most daunting tasks that managers are faced with. They must ensure that the risks are predetermined so as to make preemptive steps which are intended to cushion the business from shocks (Frank, 2008). This is the same case that faces Heritage Doll with its Match my Doll Product Line and Design your own Doll product lines. This is a challenge that the management must undertake to ensure that the company remains profitable even in the future. Understanding how to price commodities with factors such as inflation being included is often one of the considerations made in endeavors such as this. In this regard, the aspect of risk management that relates to making the best of opportunities chips in. This is in case there are high demands. Algorithms come in to ease the task of ensuring that there is a simple flow of activities. These algorithms allow for the ‘set your price’ approach which is key in ensuring that risks of losing customers are kept low and that companies reap greatly in seasons of high demand. This is an inside analysis of how heritage Doll can use the ‘set your price’ approach for the two product lines.

Match my Doll Product Line

Match my dl product line is a predesigned line of products where the customers pick the doll that the need to purchase. In applying the ‘set your price approach’ few issues are to be considered. In the case of airline ticketing and the price deviations that result from increased subscriptions and sales, there are many variables. However, in this case, the approach of setting your price is not complex. The heritage Doll can use the doll’s different features to include in the algorithm. This would create a case where dolls of a certain specification are priced differently according to their speculative and read demands. If, for instance, red dolls are in high demand over the valentine period, the algorithm would automatically increase the cost of red dolls. The same would apply over the Christmas period when red Santa dolls would sell for more. But it would be different during the Halloweens, the mystic dolls would be sold for more and the red dolls would have a lower price tag. This way, the algorithm for setting the individual prices would assist Heritage Doll to set prices according to specific prevailing conditions, thereby reducing the risk of loss from unmoving stock while taking advantage of peak seasons.

 

Design your Own Doll Product Line

For designing own doll product line, the approach of setting one’s price would be more complex. This matches more with the airline ticketing system which has many variables to consider while determining ticket prices (Pepitone 2015). Since the users will be designing their dolls using a system on the company’s website, so many variables can be included. To identify a few, the material that the doll will be made of, the features of the doll, the shape, ornaments, weight and size can all be used as inputs in the algorithm. Since risk management is aimed at reducing the possible loss, the algorithm would adjust the prices based on aspects such as ornaments, the weights and the size. This will be edged upon the demand of these particular features of the dolls. For instance, if the medium sized dolls move more than the life sized dolls, a person who wants a custom design for a doll with a medium size would have to pay more due to the increased demand for that particular size. This way, Heritage Dolls will be able to significantly reduce the risk of losing customers due to high prices when there is low demand and missing out on opportunities to make extra amount when the demand of certain custom design features is high.