Telecommunications equipment manufacturer

Assignment Help Financial Management
Reference no: EM132071519

Kiano, a telecommunications equipment manufacturer, manufactures PDAs (P), wireless handsets (H), and blackberrys (B). They have a limited supply of common parts---ethernet card (450 in inventory), antenna (250 in inventory), chipset (800 in inventory), battery/power supply (450 in inventory), LCD screen (600 in inventory)---that these products use. A PDA requites an ethernet card, 2 chipsets, a power supply, and 2 LCD screens. A wireless handset requires an ethernet card, an antenna, 2 chipsets, a power supply, and a LCD screen. A blackberry requires a chipset and a LCD screen. The profit on PDAs is $80, the profit on wireless handsets is $60, and the profit on blackberrys is $35. The following is a linear programming formulation of the problem.

Let

P = Number of PDAs produced

H = Number of wireless handsets produced

B = Number of blackberrys produced

We may write model for this problem as follows.

Maximize 80P + 60H + 35B

subject to:

(ethernet card constraint) P + H ? 450

(antenna constraint constraint) H ? 250

(chipset constraint) 2P + 2H + B ? 800

(power supply constraint) P + H ? 450

(LCD screen constraint) 2P + H + B ? 600

(non-negativity) P, H, B ? 0.

Implement the above model in Solver and make sure to choose Simplex as the solving method and to choose the option "Make Unconstrained Variables non-negative"---do not explicitly put in the non-negativity constraints in the model and using the sensitivity report only

answer the questions below:

a. Does the solution change if only 425 ethernet cards are available?

b. Is it profitable to produce Blackberrys? If not, by how much should the profit margin on Blackberrys be increased to make it profitable to produce Blackberrys?

c. Because of a change in production technology the profit margin on handsets has increased to $70. Should the production plan of Kiano change? What is their new profit?

d. 50 chipsets were found to be defective, making the number of available chipsets 750. What will the profit be in this situation?

e. Another supplier is willing to sell LCD screens to Kiano. However their prices for a LCD screen are $20 higher than what Kiano pays it's regular supplier. Should Kiano go ahead and purchase these electronic units? If yes, at most how many units should they purchase.

f. Kiano is considering introducing a new product (called the Revolutionary Communicator) that combines the wireless handset and PDA. This product uses an ethernet card, an antenna, 2 chipsets, 1 power supply, and 2 LCD screens, and is expected to make a profit of $100. Should Kiano produce the Revolutionary Communicator? Why or Why not?

Reference no: EM132071519

Questions Cloud

What is the present value of the minimum lease payments : Rental of $240 per month (at end of each month). (The present value at 1% per month is $9,552.) What is the present value of the minimum lease payments
What were the consequences of your decision : Justify and explain your decision to lie about having the second offer, and what were the consequences of your decision to lie to the buyer.
What is the NPV of investment : MHMM is considering an investment that has the same PE ratio as the firm. What is the NPV of this investment?
What is the appropriate date on the auditor report : The final audit report was completed, attached to the financial statements, delivered to the client on March 7. What is appropriate date on auditor's report
Telecommunications equipment manufacturer : Kiano, a telecommunications equipment manufacturer, manufactures PDAs (P), wireless handsets (H), and blackberrys (B).
What is the amount of the discount : What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount
Definition of production and production lifespan : Briefly discuss the definition of production and a production lifespan.
Define compensation management and incentive pay : Select two (2) different organizations within the same industry. Research employee compensation for comparable positions within these organizations.
What was the amount of louise''s gain on the disposition : The fair market value at the time of the gift was $1,400. Louise sold the property for $2,500. What was the amount of Louise's gain on the disposition

Reviews

Write a Review

Financial Management Questions & Answers

  Simple and compounded holding period returns

Calculate the simple and compounded holding period returns to three decimal places.

  Calculate the exact npv of this project

What is the cash flow in year 3 and 4 given APR is 10%? Can you calculate the exact NPV of this project using only the given information?

  What was the price of the bond at issuance

10 years ago ABC corporation issued a 20-year bond with $1000 par value, What was the price of the bond at issuance?

  What is the company total asset turnover

The Cavo Company has an ROA of 9.2 percent, What is the company’s total asset turnover? What is the equity multiplier?

  Difference between ebit and taxable income

The difference between EBIT and taxable income must be the interest expense.

  Firms would constant perpetual growth model be applicable

For which of the following firms would the constant perpetual growth model be applicable?

  Determine the various types of financial transactions

Each student should do a quick Internet search (20 minutes max) to determine the various types of financial transactions that take place on Wall Street.

  Should national foods produce this new candy

Should National Foods produce this new candy? What is the basis of your recommendation?

  Make you indifferent between buying and leasing

What break-even resale price in two years would make you indifferent between buying and leasing?

  Determine the projects NPV

Determine the projects’ NPV (all work needs to be shown). Would you purchase the equipment and why?

  What was the net additional cost of the stock

What was the net additional cost of the stock? What was the effective cost of the stock purchase (stock and futures contracts combined)?

  What would the estimated value for the property be now

Ace Investment Company is considering the purchase of the Apartment Arms project. Next year’s NOI and cash flow is expected to be $2,000,000, and based on Ace’s economic forecast, market supply and demand and vacancy levels appear to be in balance.  ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd