In preparing for the upcoming holiday season, Fresh Toy Company (FTC) designed a newdoll called The Dougie that teaches children how to dance. The fixed cost to produce thedoll is $100,000. The variable cost, which includes material, labor, and shipping costs, is$34 per doll. During the holiday selling season, FTC will sell the dolls for $42 each. IfFTC overproduces the dolls, the excess dolls will be sold in january through a distributorwho has agreed to pay FTC $10 per doll. Demand for new toys during the holiday sellingseason is extremely uncertain. Forecasts are for expected sales of 60,000 dolls with astandard deviation of 15,000. The normal probability distribution is assumed to be a gooddescription of the demand. FTC has tentatively decided to produce 60,000 units (the sameas average demand), but it wants to conduct an analysis regarding this production quantitybefore finalizing the decision.a. Create a what-if spreadsheet model using formula that relate the values of productionquantity, demand, sales, revenue from sales, amount of surplus, revenue from sales ofsurplus, total cost, and net profit. What is the profit corresponding to average demand(60,000 units)?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
In preparing for the upcoming holiday season, Fresh Toy Company (FTC) designed a new
doll called The Dougie that teaches children how to dance. The fixed cost to produce the
doll is $100,000. The variable cost, which includes material, labor, and shipping costs, is
$34 per doll. During the holiday selling season, FTC will sell the dolls for $42 each. If
FTC overproduces the dolls, the excess dolls will be sold in january through a distributor
who has agreed to pay FTC $10 per doll. Demand for new toys during the holiday selling
season is extremely uncertain. Forecasts are for expected sales of 60,000 dolls with a
standard deviation of 15,000. The
description of the demand. FTC has tentatively decided to produce 60,000 units (the same
as average demand), but it wants to conduct an analysis regarding this production quantity
before finalizing the decision.
a. Create a what-if spreadsheet model using formula that relate the values of production
quantity, demand, sales, revenue from sales, amount of surplus, revenue from sales ofsurplus, total cost, and net profit. What is the profit corresponding to average demand
(60,000 units)?
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