Create a chart that plots profit, Strategic Management

Assignment Help:

Excel is often used to perform "what-if" analyses. In these, a model that depends on a number of variables is constructed, and the outcomes predicted by the model are determined for a a range of values of the input variables.  The following matematical model describes the way in which the profit of a trucking company depends on a number of variables, including the price of petrol.

The input variables are:

1. the price of petrol in cents per litre, P;

2. the price the company charges its customers in dollars per km-tonne, T;

3. the volume of business carried out in a year, in km-tonnes, V ;

4. the rate of petrol consumption, R;

5. maintenance costs, in dollars, M;

6. the number of employees, E;

7. the average salary of employees, in dollars per year, S.

The company has no control over the price of petrol. It can decide what it will charge its customers and what the average salary of employees will be.  The volume of business carried out in a year will depend on the price charged to customers. The volume of business will determine the total price of petrol purchased during the year, the maintenance costs and the number of employees. The volume of business is given by

Vid should be the nal four digits of your student number, treated as an integer in the range [0, 9999]. So if your student number is 12345678 you should use,

 

for every 2.5 x 106 km-tonnes, or part thereof. This in turn determines maintenance costs, $12,000 per truck per year, and the number of employees, which is N + 4.

The volume of business also determines the amount of petrol consumed by the company, at the rate (R) of 0.2 litres per km-tonne.

The revenue collected by the company is VT.

The costs incurred by the company are the price paid for petrol, the costs of maintenance, salary costs and overhead costs of $60,000 per year.

The profit is the difference between the revenue and the costs. To perform the "what-if" analyses, you will need to do the following:

(a) Write a VBA function that will calculate the costs incurred by the company given P, T and S.

(b) Create a spreadsheet with cells where the values of T and S can be entered.  Beneath them construct a table with the column headings Price of petrol, Volume of business, Revenue collected, Costs incurred and Profit. In the first column, insert prices going from $1.00 to $2.00 in increments of five cents. Set up formulae in the remaining columns that will perform the required calculations.

(c) Create a chart that plots profit against the price of petrol.

(d) Test the spreadsheet using the values of  T = 0.40 and take the value of S from the first five digits of your student number. So if your student number is 12345678 take S = 12345 as the salary amount to use in your test.


Related Discussions:- Create a chart that plots profit

Strategy and organization analysis, 1. Describe and analyze the environment...

1. Describe and analyze the environment, strategy, and structure of your organization of choice. It is critical to provide evidence for your analysis. 2. Assess the challenges and

Steps for setting up a maintenance strategy, Question: (a) Briefly elab...

Question: (a) Briefly elaborate on the steps for setting up a maintenance strategy. (b) Failures can be grouped in the following three categories namely Induced, Intermitten

Strategy and employee performance, Select an existing business that aligns ...

Select an existing business that aligns their business strategy with employee performance. You may also use your own company. Consider the effect this alignment has had on sustaini

Explain functional strategy, Explain Functional strategy Functional st...

Explain Functional strategy Functional strategy for J plc will be concerned with how the constituent parts of the organisation can effectively deliver the corporate and busin

Why a strategic plan, Most executives are related with business planning. A...

Most executives are related with business planning. A business plan is typically written every year and includes things like a marketing plan, cash flow projections, a mission stat

The strategic option of withdrawal might be considered where, An organizati...

An organization is unable to secure enough resources or competence.

GE Healthcare, 1. Determine two (2) specific ethical issues that General El...

1. Determine two (2) specific ethical issues that General Electric (GE) Healthcare faced when implementing its strategy to introduce low cost diagnostic equipment to developing cou

Effect of support on negative affect, There is wide support from government...

There is wide support from government agencies for people to exercise and indeed take part in sport. For many sportspeople, however, injury plays a part in their day-to-day sportin

Fixing the knowledge gap, Fixing the Knowledge Gap: Planning  Now com...

Fixing the Knowledge Gap: Planning  Now commence the 'Fixing knowledge gap' phase by identifying the broad nature of the solution required, as follows:  a)  Wherever you h

How you can recognizing a company’s strategy, Recognizing a Company's Strat...

Recognizing a Company's Strategy 1.   A company's strategy is reproduced in its actions in the marketplace & the statements of senior managers regarding the company's current b

Write Your Message!

Captcha
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