A finished DBA-815 Topic 7 tested price recommendation example, setting new-member dues by competitive setting from test results and refusing to extrapolate past the price range observed. Searches like "dba 815 topic 7 assignment example", "dba815 topic 7 sample" and "dba-815 topic 7 example" land here.
What a finished DBA-815 Topic 7 tested price recommendation looks like
Results arrive as a table by competitive setting, figures illustrative. In the three uncontested pairs, joins at $54 ran about 5 percent below those at $49, and six months on the $54 cohort had canceled at 19 percent against 17. Together those imply a six-month elasticity near -0.7, and each monthly cohort now yields about 5 percent more contribution. Both overlap pairs lost about a quarter of their joins, the figure behind the rival-response analysis, and the single entrant pair lost 12 percent, too thin to act on. The recommendation follows the table: $54 for new members at six clubs, $49 held at eight, existing members untouched. The markup rule suggests headroom above $54, yet the report proposes a $59 test arm rather than a jump. What the test cost is treated as spent.
How a DBA-815 Topic 7 example is structured
Price and evidence share the first page, the recommendation stated in one sentence with its supporting table directly beneath. The test design is restated briefly: six matched pairs, new members only, eight weeks of joins and six months of cancellations. Results are then broken out by competitive setting, with the arithmetic that turns joins and cancellations into a six-month elasticity for each group. Every setting gets its own decision, raising where the evidence is strong and no rival can answer, holding where the rival would, and extending the test where one pair is all there is. A section on the markup rule concedes that it points above $54 and explains why the report stops at the tested step. The objection that six months understates long-run response is met with a reversal trigger tied to twelve-month cancellations. The last section names the next test arm and when it reports.
The price stated before the reasons
New members at the six uncontested clubs pay $54 from the next billing cycle, while every other club and every existing member stays at $49.
Joins and cancellations read together
A 5 percent drop in joins and a two-point rise in six-month cancellations combine into an elasticity near -0.7 for the uncontested clubs.
Why the overlap clubs hold
Joins there fell by about a quarter at $54 while the rival kept its price, and nothing in its record shows whether it would follow a rise.
One entrant pair proves little
A 12 percent drop observed at two clubs could be local noise, so the entrant clubs keep their price while the test is extended there.
Headroom the report declines to use
At $54 the markup rule implies demand is still less responsive than a profit-maximizing price would leave it, but only a $59 arm can confirm that.
A trigger for reversing the rise
Should twelve-month cancellations in the $54 cohort run more than five points above the $49 cohort, new-member dues at those clubs return to $49.
Where marks go in DBA-815 Topic 7
A price justified by the chain-wide -1.3, or by any figure the test never measured for the clubs being repriced, loses marks before anything else is read. Raising dues at all fourteen clubs because the uncontested result was favorable applies one setting's elasticity to three. Papers that read the markup rule as permission to jump to $64 extrapolate a demand curve the test observed at two points only. Existing members are sometimes swept into the rise, although the test priced joiners alone and never measured how long-standing members respond. Arguing that the test's cost has to be recovered through a wider rise treats a sunk cost as relevant, and graders typically mark that wrong outright. A recommendation carrying no reversal trigger asks executives to treat six months of evidence as permanent.
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DBA-815 Topic 7 questions, answered
Why not go above $54 if the markup rule allows it?
Because the rule identifies the best price only if elasticity stays where it was measured, and the test observed demand at $49 and $54 alone. Demand can bend sharply above a tested price, particularly where a rival's clubs sit just outside a member's travel radius. The report treats the rule as a reason to test $59 in the uncontested pairs, not as evidence of what $59 would do.
Why are existing members left at $49?
Because nothing in the test measured how they respond. New joiners compare the chain with alternatives before signing, while long-standing members weigh habit, friendships and the effort of switching, and a rise on a bill they already pay may strike them as unfair in a way a posted price does not. A rise for them would need its own evidence, so the report leaves it out.
Does the test's cost belong in the decision?
No. The money spent running six matched pairs is gone whether the chain changes one price or none, so it cannot make any option better than another. What the test bought is information, and the only live question is what that information supports. A wider rise chosen to make the test look worthwhile would give up real contribution to justify an expense already paid.