Final answer:
The supplier's selling price is determined by the cost of production and desired profit. Retailer's demand and costs influence the price.
Step-by-step explanation:
The supplier's selling price for SKU 707BOE brown place mats is determined by the cost of production and the desired profit of the supplier. The cost of production includes the cost of producing the place mats, such as materials, labor, and overhead expenses. The desired profit is determined by factors like the profit margins in the industry.The supplier will set the selling price by adding the cost of production and the desired profit together. This price will depend on the quantity of placed the supplier aims to sell and the associated price.The retailer's demand and costs will influence the supplier's selling price. If the retailer's demand for the place mats is high, the supplier may be able to charge a higher price. However, if the retailer's costs are too high, they may not be willing to pay a higher price to the supplier.