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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Trips Logistics, a third-party logistics firm that provides warehousing and other logistics services, is facing a decision regarding the amount of space to lease for the upcoming three-year period. The general manager has forecast that Trips Logistics will need to handle a demand of 100,000 units for each of the next three years. Historically, Trips Logistics has required 1,000 square feet of warehouse space for every 1,000 units of demand. For the purposes of this discussion, the only cost Trips Logistics faces is the cost for the warehouse. Trips Logistics receives revenue of $1.22 for each unit of demand. The general manager must decide whether to sign a three-year lease or obtain warehousing space on the spot market each year. The three-year lease will cost $1 per square foot per year, and the spot market rate is expected to be $1.20 per square foot per year for each of the three years. Trips Logistics has a discount rate of k = 0.1.
Quantum Ltd. (QL) was created by a group of university students who completed film school and wanted to create feature films using Canadian locations and Canadian film crews. QL’s management team knows that there may be difficulties working in some locations due to terrain, weather, and availability of personnel trained to work in the film industry. As a result, QL is going to set up training programs to allow interested Canadians to take unpaid internships to shadow QL’s film crews and learn the trade so on a future film individuals can obtain paid positions. QL believes this will also give it an advantage in the film industry, as it will be creating an effective and efficient film-making team.
QL’s office staff is working to prepare a film schedule including film topics, locations, and available film workers. QL feels it can pay competitive salaries to qualified personnel working on its films. The average feature film takes 90 days to complete, from storyboard creation to the final…
Management of AG Travel and Tour has identified two groups of individuals that would be interested in the vacation package consisting of room and board and/or entertainment. The maximum amount that group 1 is willing to pay for room and board is GHC 2500 and for entertainment is GHC 500. For group 2, the maximum amount they are willing to pay for room and board is GHC 1800 and for entertainment is GHC 750. Although AG Travel and Tour is not able to identify members of either group, it does know that each group values the components of the package differently. Assuming there are an equal number of members in each group and that the total membership in each group is a single individual. If the marginal cost of providing the service (room and board and/or entertainment) to each group is GHC 1000.
What will be the profit for AG Travel and Tour in the case of (iii) above?
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