Find out maximum demand for medium model , Finance Basics

Assignment Help:

A company that manufactures electrical appliances is looking at one of its lines (washing machines), where it offers three different levels of specification: Basic which sells for £250, Medium which sells for £450 and Luxury which sells for £700. The production of each machine goes through four different stages and you have been provided with the following data table:

Process\Machine

Basic

Medium

Luxury

Cost per hour

Max. Available

Forming

1.5 hours

3 hours

7 hours

£5.50

6,500 hours

Machining

5 hours

8 hours

14 hours

£7.50

18,000 hours

Assembly

2.5 hours

4.5 hours

8 hours

£9.50

8,500 hours

Testing

2 hours

2 hours

2 ½ hours

£12.00

5,200 hours

 

 

 

 

 

 

The marketing department has also done some market research and believes demand for each of the models is limited to 1,450 units of the basic model, 900 of the medium and 750 of the luxury. You are required to:

1. Formulate this problem as a linear program and use Excel's Solver to arrive at a solution, identifying what is the maximum profit the company can achieve in the washing machine product line.

2. How would your answer change if the following happened:

a. Maximum demand for Medium model was 1,000; OR

b. Maximum available Assembly hours were 9,500.

3. Write a report with a recommended production and marketing plan for the company.


Related Discussions:- Find out maximum demand for medium model

Comparison between modern and traditional methods, Comparison between Moder...

Comparison between Modern and Traditional Methods Both modern and traditional methods will indicate or show strong weaknesses which like a company cannot use either to choose

State the realised and expected return, State the Realised and Expected Ret...

State the Realised and Expected Return Return is not as simple a notion as it appears to be as it's not guaranteed, it is mostly expected, and it may or may not be realized.

Development of plastic money in middle asia, Development of Plastic Money i...

Development of Plastic Money in Middle Asia Motive behind the Fast Development of This Finance (Plastic Money) In Middle Asia a) High incidences of fraud via dishonest empl

Determination of the coupon rate, The partners are still unhappy about one ...

The partners are still unhappy about one of the features of your analysis, namely your assumption that the coupon rate of the bond is equal to 6% per annum. Their thinking is that

Liquidity preference theory, Liquidity Preference Theory This theory s...

Liquidity Preference Theory This theory states that short term bonds are extremely favorable than long term bonds for two (2) purposes. 1. Investors usually prefer short te

Baumol's model - optimal cash balance, Baumol's Model - Optimal Cash Balanc...

Baumol's Model - Optimal Cash Balance An application of the EOQ is the Baumol's model which is inventory model to cash management. Its statements are as: The firm emplo

Pbp reciprocal, PBP Reciprocal PBP expresses the profitability of a pr...

PBP Reciprocal PBP expresses the profitability of a project in terms of years.  It does not indicate any return as measure of investment. The PBP reciprocal has been utilized

Importance and solution of dividend decisions, Importance and Solution of D...

Importance and Solution of Dividend Decisions Dividends decisions are integral part of a firm's strategic financing decision. It is hence a plan of action adopted by managemen

Maximum price of uniformed bonds, Say that a buyer of bonds values good bon...

Say that a buyer of bonds values good bonds at $500 and values bad bonds at $250. Sellers of both good and bad bonds value them at $350. If the fraction of good sellers and bad s

Valuation of securities, Valuation of Securities The previous methods ...

Valuation of Securities The previous methods were perfect for valuing the entire business however it is also essential to ascertain the value of part of a business namely shar

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