Fixed Price Calculation Formula

Overview

The objective is to calculate a fixed price based on a range of input values representing the number of persons. The calculation will employ a base price and may be adjusted by a multiplier depending on the number of persons specified.

Formula Creation

Formula Structure

The formula for calculating the fixed price can be represented as follows:

FixedPrice = BasePrice * (1 + ((NumberOfPersons - 1) * PriceAdjustment))

Parameters

• BasePrice: The initial price for one person.
• NumberOfPersons: The total number of persons for whom the price is being calculated.
• PriceAdjustment: The percentage increase per additional person, as a decimal (e.g., 0.1 for 10%).

Explanation of the Formula

1. BasePrice: This is the constant starting point for your pricing model.
2. NumberOfPersons: The input that directly affects the final output. The formula accounts for different numbers of persons.
3. PriceAdjustment: This parameter allows for incremental pricing based on the number of persons. When the number of persons exceeds one, an additional cost is added per additional person.
4. (1 + ((NumberOfPersons - 1) * PriceAdjustment)): This part of the formula scales the base price based on the additional persons. If NumberOfPersons is 1, no additional charge applies. For 2 persons, it considers the first additional person, and so on.

Practical Example

Example Parameters

• BasePrice: 100 (for 1 person)
• NumberOfPersons: 5
• PriceAdjustment: 0.2 (20% increase for each additional person)

Calculation

Using the formula:

FixedPrice = 100 * (1 + ((5 - 1) * 0.2))
            = 100 * (1 + (4 * 0.2))
            = 100 * (1 + 0.8)
            = 100 * 1.8
            = 180

Result

• The calculated FixedPrice for 5 persons would be 180.

Conclusion

The outlined formula effectively calculates a fixed price based on the number of persons involved, with adjustments for any increments beyond the first person. This model is beneficial for pricing strategies in various applications such as event planning, group services, and more.

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