Tee-shirt Integration Tee-shirt Titan produces a variety of lines ...

[abarnes]

Tee-shirt Integration Tee-shirt Titan produces a variety of lines of ironic designs that it sells nationwide. It also sells plain tee-shirts in a variety of colors to smaller local silkscreen shops. It noticed that one of these, Shasta Shirtwerkz, has experienced substantial growth and profitability due to its even more clever designs. Should Tee-shirt Titan purchase Shasta Shirtwerkz as another line within their product offerings?

Question 2

Mixed bundling is
 a. Where customers pay for each item separately
  b. Where customers buy all item in a store at one price
  c. Where customers have a choice of buying each item separately or all items at one price
  d. Where customers are charged one fixed fee and a cost per unit for every unit bought

[maya.nigrin17@yahoo.com]

Answer to Question 1

As written, while Shasta Shirtwerkz is profitable, there are no obvious integration synergies that would move an asset from a low valued use to a higher one. In fact, the question states that Titan would simply fold Shasta into its product offerings implying few, if any, changes in operations. When you buy a customer simply because it is profitable, you will tend to pay the net present value of its stream of future profits.

Answer to Question 2

c