Reference no: EM13246817

Multilevel car parks are usually constructed to minimize the spacethat cannot be directly used for parking. Thus, they have lowceilings, are typically very crammed with cars, and the visibilityis very low. Despite using colours and segment numbers eg Bluelevel, area 4, it is frequently difficult for people to find theircars, because of the low visibility (can not see one car behindanother) and the huge number of cars.

You are a young engineer who has been engaged to develop a simpleand inexpensive method to assist people to find their cars. Whileyou are allowed $150,000 for development, your end product mustcost less than $1 per car in the first year of operation (themarketing department has calculated that this amount can be passedonto to customers with out loss of business). After this time it isenvisaged that the system will make a profit of at least $1,000,000per year. If each car space is on average occupied by 3 cars perday, 7 days per week and the car park runs on average at 80%capacity and can accommodate 2000 cars.

(i) The maximum manufacturing cost of each product.

(ii) The maximum permissible cost of operating the system in thesecond and subsequent years.

(iii) Determine how long it will take the product to break evenif you assume (i) and (ii)