Answer
The stand-alone revenue-allocation method uses specific product information within a bundle as weights to allocate bundled revenues to individual products. In contrast, the incremental revenue-allocation method ranks products within a bundle based on certain criteria and allocates revenue incrementally, with the primary product receiving revenue equivalent to its stand-alone value, while subsequent products receive additional revenue based on the number of products in the bundle beyond the primary one.
Work Step by Step
The stand-alone revenue-allocation method uses specific product information within a bundle as weights to allocate bundled revenues to individual products. In contrast, the incremental revenue-allocation method ranks products within a bundle based on certain criteria and allocates revenue incrementally, with the primary product receiving revenue equivalent to its stand-alone value, while subsequent products receive additional revenue based on the number of products in the bundle beyond the primary one.