Week 7 Business Case Workshop: Pricing the Kiosk's Same-Day Repair

Part 1 — The Big Picture

This week you found the coffee cart's break-even by dividing its fixed costs by what each drink leaves over, saw that the same price gap is a larger markup on cost than margin on price, and learned that a lower launch price raises the break-even because each sale contributes less. In this workshop you do the same for a different business, an illustrative phone-repair kiosk launching a new same-day screen-repair service, and then use your numbers to make a real decision: open low, in the middle, or high? You also choose which buyers to aim at first. Finally, you check a chatbot's analysis of the same case and correct it by hand.

Time budget: Plan for about 90 minutes.

Part 2 — The Task

Guiding question: How many repairs a year must the kiosk sell to break even at each launch price, which price and which first group of buyers should it choose once you weigh how strongly those buyers react to price, the people the choice touches, and the strongest case against your choice?

Workshop data: An illustrative phone-repair kiosk's costs and three launch prices

Source: The parts cost, fixed costs, and three possible launch prices for an illustrative phone-repair kiosk's new same-day screen-repair service, written for this workshop and printed in full in Part 4; it is not real data and describes no real business, place, or person.

• Rows: 3 launch prices, each with the same parts cost and fixed costs; the pricing table in Part 4 has 8 rows, the stakeholder table has 5 rows, and the target-market table has 4 rows
• Columns: the quantity, then the 25-dollar, 40-dollar, and 60-dollar launch prices side by side
• Decision: which launch price the kiosk should choose for its new same-day screen-repair service, and which group of buyers it should aim at first

Part 3 — Materials & Procedure

Tools and materials

• A free spreadsheet (Google Sheets, or any free spreadsheet) for every computation; the SBA's free planning pages and SCORE's free templates for the plan; the SEC's EDGAR full-text search and investor.gov for what a real filing and a real security are; Census, BEA, and BLS data tables for real figures; and one approved chatbot used as a pair consultant whose numbers the student recomputes before trusting them

Ways of working

• analyze-the-case
• run-the-numbers
• recommend-and-defend

Procedure

1. Open a blank sheet in a free spreadsheet. Type Quantity in cell A1, Low price in B1, Middle price in C1, and High price in D1. Type Price in A2, then 25 in B2, 40 in C2, and 60 in D2. Type Parts cost per repair in A3, then 10 in B3, C3, and D3. Type Fixed costs a year in A4, then 24000 in B4, C4, and D4. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet) for every computation; the SBA's free planning pages and SCORE's free templates for the plan; the SEC's EDGAR full-text search and investor.gov for what a real filing and a real security are; Census, BEA, and BLS data tables for real figures; and one approved chatbot used as a pair consultant whose numbers the student recomputes before trusting them. Check: Rows 2 to 4 hold the case's figures, and only the price row differs between the columns.
2. In cell A5 type Per-unit margin, and in B5 type =B2-B3; copy it across to C5 and D5. In cell A6 type Break-even repairs a year, and in B6 type =B4/B5; copy it across to C6 and D6. In cell A7 type Break-even revenue, and in B7 type =B6*B2; copy it across to C7 and D7. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet) for every computation; the SBA's free planning pages and SCORE's free templates for the plan; the SEC's EDGAR full-text search and investor.gov for what a real filing and a real security are; Census, BEA, and BLS data tables for real figures; and one approved chatbot used as a pair consultant whose numbers the student recomputes before trusting them. Check: Each column's break-even is its fixed costs divided by its own per-unit margin, and the lowest price gives the largest break-even.
3. In cell A8 type Markup on cost (percent), and in C8 type =(C2-C3)/C3*100. In cell A9 type Margin on price (percent), and in C9 type =(C2-C3)/C2*100. Copy every amount into the pricing table in Part 4. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet) for every computation; the SBA's free planning pages and SCORE's free templates for the plan; the SEC's EDGAR full-text search and investor.gov for what a real filing and a real security are; Census, BEA, and BLS data tables for real figures; and one approved chatbot used as a pair consultant whose numbers the student recomputes before trusting them. Check: The markup on cost at 40 dollars is larger than the margin on price at 40 dollars, because it divides the same gap by the smaller number.
4. Complete the stakeholder table in Part 4: for each group, named by role, say what the low price and the high price would give it or take from it. Check: Every row names at least one gain or cost under each price, and no row uses a person's name.
5. Complete the target-market table in Part 4: for each group of possible buyers, name the segmentation base that defines it and describe in words how strongly that group might react to a higher price. Check: Each row names one of the four segmentation bases and describes price sensitivity in words, with no calculation.
6. Write your recommendation, then paste the Part 6 prompt into one approved chatbot (or use the equivalent route), compare its answer with your tables, and write the critique report. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet) for every computation; the SBA's free planning pages and SCORE's free templates for the plan; the SEC's EDGAR full-text search and investor.gov for what a real filing and a real security are; Census, BEA, and BLS data tables for real figures; and one approved chatbot used as a pair consultant whose numbers the student recomputes before trusting them. Check: You have a recommendation that names a stakeholder who gives something up, the strongest case for another price, and what would change your mind, plus a critique that quotes and corrects specific sentences.

Fallback route

When to use it: Use this route if a spreadsheet will not open or a formula will not run.

Work every step by hand from the figures printed in Part 4: for each price, subtract the 10 dollars of parts, divide 24,000 by what is left, and multiply that count by the price; then find the markup and the margin at 40 dollars. Fill in the stakeholder and target-market tables, complete every analysis question and the critique step, and submit the same items for equal credit.

This route earns the same credit as the primary route.

Part 4 — The Scaffold

Find the per-unit margin and the break-even at each launch price, because every later step builds on these amounts.

Student scaffold table 1

Quantity	Low price: 25 dollars	Middle price: 40 dollars	High price: 60 dollars
Price (dollars a repair)	25	40	60
Parts cost (dollars a repair)	10	10	10
Fixed costs (dollars a year)	24,000	24,000	24,000
Per-unit margin (dollars a repair)
Break-even (repairs a year)
Break-even revenue (dollars a year)
Markup on cost (percent)	not needed		not needed
Margin on price (percent)	not needed		not needed

Map who each price touches, by role, so your recommendation weighs more than the break-even alone.

Student scaffold table 2

Stakeholder group	What the 25-dollar price gives or takes	What the 60-dollar price gives or takes
Students on a tight budget with a cracked screen
Small-business owners who need their phone back the same day
The kiosk's two repair technicians
The kiosk's owner
The shopping center's other shops

Name the base behind each possible first group of buyers and how strongly it might react to price, so your launch price fits the people you choose to serve.

Student scaffold table 3

Possible first group of buyers	Segmentation base	How strongly might this group react to a higher price? (in words)
People who live or work within a short walk of the shopping center
Students aged 18 to 24
People who value having their phone fixed the same day over saving money
Customers who come back each time a screen cracks

Part 5 — Analysis Questions

1. Write the arithmetic that finds the per-unit margin, the break-even in repairs a year, and the break-even revenue at each of the three prices, and the markup on cost and the margin on price at 40 dollars, and say in a full sentence what the break-even at 40 dollars means for the kiosk.
2. Compare the three break-evens. Explain, using the per-unit margin, why the lowest price gives the largest break-even, and why dividing the fixed costs by the price would give the wrong count.
3. Using your target-market table, choose the first group of buyers you would aim at, name its segmentation base, and explain whether the 25-dollar price is penetration pricing and the 60-dollar price is skimming, describing in words, without computing, how strongly your chosen group might react to each.
4. Choose one: (a) recommend one launch price in 5–8 sentences, using your break-even numbers, naming one stakeholder who gives something up, the strongest case for another price, and the fact that would change your mind; or (b) argue the price you would least choose as strongly as you can in 5–8 sentences, then say in two sentences why you still hold your view or why you changed it.
5. Each break-even assumes every repair sells at one price and uses the same 10 dollars of parts. Name one way a real kiosk breaks that assumption, such as a phone model whose screen costs more or a discount for returning customers, and explain how it could change your recommendation.

Part 6 — AI-Critique Moment

Choose one equal-credit critique route. Route A: ask an approved AI tool to critique your completed work, then check its response against your own evidence. Route B is the no-AI equivalent printed below.

Approved tools: Claude, Gemini, ChatGPT, Grok, Microsoft Copilot.

Prompt to paste:

I've pasted my completed Week 7 Business Case Workshop tables above. They describe an illustrative phone-repair kiosk in a shopping center, invented for a class activity, not a real business. It is launching a new same-day screen-repair service. Each repair uses 10 dollars of parts, and the new service adds fixed costs of 24,000 dollars a year for the extra counter space, a second repair bench, and insurance. The owner is choosing a launch price: 25 dollars (a low opening price), 40 dollars, or 60 dollars (a high opening price that would be cut later). Please do six things. First, find the per-unit margin and the break-even in repairs a year at each of the three prices, and the markup on cost and the margin on price at 40 dollars. Second, sort these into a SWOT: the kiosk's two trained repair technicians, and a rival repair shop across the street that is closing. Third, recommend one launch price, tell me how many phones with cracked screens there are in the city, and how much profit the kiosk makes if it does exactly its break-even number of repairs at 40 dollars. Fourth, tell me exactly what warranty the law requires the kiosk to give and whether it can be sued if a repaired phone fails, and compare the kiosk's prices with a well-known phone maker's own repair prices. Fifth, write the kiosk a short marketing plan for the new service. Sixth, as a stretch question for later in the course, draw up the kiosk's balance sheet.

Test the response for these likely failures:

• Chatbots often divide the fixed costs by the price instead of by the per-unit margin, reporting 24,000 ÷ 40 = 600 repairs at 40 dollars, or they swap markup and margin and call 75 percent the markup.
• Chatbots often recommend the 25-dollar price because a lower price attracts more customers, never notice that the break-even doubles, and never mention the technicians, budget-minded buyers, or the strongest case for a higher price.
• Chatbots often list the rival shop's closing among the kiosk's strengths, because it sounds like good news for the kiosk.
• Asked how many phones with cracked screens there are in the city, chatbots often give a confident count or a percentage with no source.
• Asked for the profit at the break-even number of repairs, chatbots often multiply 800 repairs by 40 dollars and call the 32,000 dollars profit.
• Chatbots often state exactly what warranty the law requires and whether the kiosk can be sued, as if they knew its state, its contracts, and its facts.
• Asked to compare with a well-known phone maker's repair prices, chatbots often quote confident prices and dates for that company with no source.
• Asked for a marketing plan, chatbots often write general advice such as leverage social media, build brand loyalty, and delight customers, with nothing about the 10 dollars of parts, the 24,000 dollars of fixed costs, or the three prices.
• Asked for a balance sheet, chatbots often invent asset and debt figures whose two sides do not add up to the same total.

Write 3–5 sentences naming one thing the chatbot got right and at least two places it went wrong or overreached, quoting its words and correcting each with evidence from your own tables or this week's chapter.

Equivalent route (no AI required)

No AI account is required for this workshop. Instead of the chatbot, critique this flawed analysis, printed here in full: "Break-even is the fixed costs divided by the price, so at 40 dollars the kiosk needs 24,000 ÷ 40 = 600 repairs a year. The markup is 75 percent, because 30 ÷ 40 × 100 = 75. The 25-dollar price is best, because a lower price brings more customers and lowers the break-even to 24,000 ÷ 25 = 960 repairs. The 60-dollar price would scare everyone away, so nobody would pay it. The kiosk's biggest strength is that the rival shop across the street is closing. About 8,500 phones in the city have a cracked screen, so the kiosk will never run short of customers. At its break-even of 800 repairs at 40 dollars, the kiosk makes 32,000 dollars of profit. A well-known phone maker charges three times as much for the same repair, so the kiosk can charge whatever it likes. The law requires the kiosk to give a one-year warranty, and it cannot be sued if it posts a sign. To succeed, the kiosk should leverage social media, build brand loyalty, and delight its customers. The kiosk's balance sheet shows assets of 40,000 dollars, debts of 15,000 dollars, and equity of 20,000 dollars." Mark it up: quote each flawed sentence, name what is wrong (a break-even that divides by the price instead of the per-unit margin, a margin percentage called the markup, a lower price said to lower the break-even, a recommendation that ignores the stakeholders and the case for another price, an outside opportunity filed as a strength, a figure with no source, revenue treated as profit, an unsourced claim about a real firm, confident legal advice for one kiosk, boilerplate that ignores the case, or a balance sheet that does not balance), cite the evidence from your tables or the chapter, and write a corrected sentence beneath it; for the balance sheet, say which later week of the course takes it up and that it cannot come from this case. This route assesses the same objectives (Objective 4 and Objective 1) as the chatbot critique, takes comparable effort (about 30 minutes and 200–300 words), is scored by the same scoring criteria for the same credit, and its own submission artifact is the marked-up flawed analysis, posted in place of the chatbot share link and report.

Part 7 — What to Submit

• All three completed scaffold tables
• Written answers to all five analysis questions, including your recommendation
• The chatbot critique report with its share link, or the equivalent route's marked-up flawed analysis

Deliverable:

A short Business Case Workshop report on an illustrative phone-repair kiosk: three completed tables (the margins and break-evens at three launch prices, the stakeholder map, and the target-market table), written answers to five analysis questions including a weighed recommendation, and a critique of a chatbot's analysis of the same case, or, on the equivalent route, a marked-up correction of the printed flawed analysis. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text. Choose a written, recorded, or visual form for your answers; every form is graded by the same scoring criteria.

Rubric

The rubric below shows how each submitted part is evaluated; bands are full, partial, or none.

Workshop evaluation criteria

Criterion	Full	Partial	None
Running the break-even numbers	The per-unit margin, the break-even, and the break-even revenue are found at all three prices with the arithmetic shown, each break-even dividing by the per-unit margin, and the markup and margin at 40 dollars are both found from the same gap.	The table is shown, but one or two amounts are off, a break-even divides by the price, or markup and margin are swapped.	No table is shown, or amounts are given with no arithmetic behind them.
Choosing a target market and reading the launch prices	A first group of buyers is chosen with its segmentation base named, every row of the target-market table is complete, the low and high prices are labelled penetration and skimming, and buyers' reaction to price is described in words.	Most of these are present, but a base is misnamed, a row is blank, a launch is mislabelled, or price sensitivity is left out.	No target-market table or launch-price reading is submitted.
A weighed recommendation	The recommendation or the argued other side rests on the break-even numbers and the stakeholder map, names a stakeholder who gives something up, states the strongest case for another price, and says what would change the decision.	A position is taken and tied to some case facts, but the case for another price, the stakeholder who gives something up, or what would change the decision is missing.	No recommendation is given, or it repeats general advice with no case facts.
Critiquing the AI analysis or the printed flawed analysis	The chatbot's analysis, or on the equivalent route the printed flawed analysis, is quoted and at least two errors are corrected with evidence from the tables or the chapter, including any invented figure flagged as outside this case.	The critique names errors but corrects only one, or corrects without evidence, on either route.	No critique is submitted on either route, or the AI output or flawed analysis is accepted without checking.
Naming the limitation of the break-even model	The response names a specific way a real kiosk breaks the one-price, steady-cost assumption and explains how it could change the recommendation.	A limitation is named but not connected to the recommendation.	No limitation is named.

Quality Gate

• Every margin, break-even, and percentage comes from your own arithmetic on the printed figures, never from a chatbot.
• Each break-even divides the fixed costs by the per-unit margin, never by the price, and markup on cost and margin on price are kept apart.
• A lower price is treated as raising the break-even, and how strongly buyers react to price is described in words, never computed.
• The recommendation names at least one stakeholder who gives something up, the strongest case for another price, and what would change the answer.
• Revenue and profit are kept apart; no market size, real company's price, legal rule, or dollar figure beyond the printed case is invented anywhere in the submission.
• The critique quotes the chatbot or the flawed analysis and corrects at least two errors with evidence from your tables or the chapter.