Posted in Planning and control decisions, Internet company. WebNews.com offers its subscribers several services, such as an annotated TV guide and local-area information on weather, restaurants, and movie theaters. Its main revenue sources are fees for banner advertisements and fees from subscribers. Recent data are as follows:
|
Month/Year |
Advertising Revenues |
Actual Number of Subscribers |
Monthly Fee Per Subscriber |
|
June 2009 |
$ 415,972 |
29,745 |
$15.50 |
|
December 2009 |
867,246 |
55,223 |
20.50 |
|
June 2010 |
892,134 |
59,641 |
20.50 |
|
December 2010 |
1,517,950 |
87,674 |
20.50 |
|
June 2011 |
2,976,538 |
147,921 |
20.50 |
The following decisions were made from June through October 2011:
a. June 2011: Raised subscription fee to $25.50 per month from July 2011 onward. The budgeted number of subscribers for this monthly fee is shown in the following table.
b. June 2011: Informed existing subscribers that from July onward, monthly fee would be $25.50.
c. July 2011: Offered e-mail service to subscribers and upgraded other online services.
d. October 2011: Dismissed the vice president of marketing after significant slowdown in subscribers and subscription revenues, based on July through September 2011 data in the following table.
e. October 2011: Reduced subscription fee to $22.50 per month from November 2011 onward.
Results for JulyâSeptember 2011 are as follows:
|
Month/Year |
Budgeted Number of Subscribers |
Actual Number of Subscribers |
Monthly Fee per Subscriber |
|
July 2011 |
145,000 |
129,250 |
$25.50 |
|
August 2011 |
155,000 |
142,726 |
25.50 |
|
September 2011 |
165,000 |
145,643 |
25.50 |
1. Classify each of the decisions (aâe) as a planning or a control decision.
2. Give two examples of other planning decisions and two examples of other control decisions.
