Spreadsheet Modeling & Decision Analysis: A Practical Introduction To Business Analytics, Loose-leaf Version
8th Edition
ISBN: 9781337274852
Author: Ragsdale, Cliff
Publisher: South-Western College Pub
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You are a new salesperson at a large software manufacturing firm. It is three weeks from the end of the sales quarter and you and your sales manager have both already met your sales quotas for the quarter. In addition, you just closed another deal with a new customer for $100,000 worth of software and customer service. This order would put you way over your sales quota for the current quarter. Your manager suggests that you hold this new order so it gets recorded against next quarter. She explains that because sales during the next three months tend to slow down, salespeople frequently miss their quotas and associated sales bonuses for that quarter. Holding this large order to next quarter would help you get an excellent start and almost guarantee that you meet your quota. What would you do?
Management of the Toys R4U Company needs to decide whether to introduce a certain new novelty
toy for the upcoming Christmas season, after which it would be discontinued. The total cost required
to produce and market this toy would be $500,000 plus $15 per toy produced. The company would
receive revenue of $35 for each toy sold.
Assuming that every unit of this toy that is produced is sold, write an expression for the profit in terms
of the number produced and sold. Then find the break-even point that this number must exceed to
make it worthwhile to introduce this toy.
Now assume that the number that can be sold might be less than the number produced. Write an
expression for the profit in terms of these two numbers.
Formulate a spreadsheet that will give the profit in part b for any values of the two numbers.
Write a mathematical expression for the constraint that the number produced should not exceed the
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Andy’s Bicycle Company (ABC) has the hottest new product on the upscale toy market—boys’ and girls’ bikes in bright fashion colors, with oversize hubs and axles; shell design safety tires; strong padded frames; chrome-plated chains, brackets, and valves; and non-slip handlebars. Due to the seller’s market for high-quality toys for the newest baby boomers, ABC can sell all the bicycles it manufactures at the following prices: boys’ bikes, $220; girls’ bikes, $175. This is the price payable to ABC at its Orlando plant. The firm’s accountant, V. R. Dondeti, has determined that direct labor costs will be 45% of the price that ABC receives for the boys’ model and 40% of the price received for the girls’ model. Production costs, other than labor but excluding painting and packaging, are $44 per boys’ bicycle and $30 per girls’ bicycle. Painting and packaging are $20 per bike, regardless of model. The Orlando plant’s overall production capacity is 390 bicycles per day. Each boys’…
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