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

Ibo-4, What is the need for documents in international business? Substantia...

What is the need for documents in international business? Substantiate your answer with suitable examples.

Determine the weighted average cost of capital, 1. The current interest rat...

1. The current interest rate is 6.83%. CanGo.com's stock has a beta of 2.0. Estimate the cost of equity. 2. CanGo.com has a bond with a semiannual coupon rate of 9% and 5 year m

Micro economics, effect of gdp in the domestic market

effect of gdp in the domestic market

Agency theory, Agency Theory An agency relationship arises whether on...

Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some

Formation of sole proprietorship business, Formation of Sole Proprietorship...

Formation of Sole Proprietorship Business When an individual plans to start a business, his or her main objective is to earn profit but there are a number of factors to take in

Setting of optimal cash balance, Setting of Optimal Cash Balance Cash ...

Setting of Optimal Cash Balance Cash is often identified like a non-earning asset since holding cash quite than a revenue-generating asset includes a cost in form of foregone

Limitations of middle asia stock exchange index, Limitations of Middle Asia...

Limitations of Middle Asia Stock Exchange Index 1. The twenty (20) company's sample whose share prices are utilized to calculate the index are not true representatives. 2.

Bases of share valuation, Bases of Share Valuation Share valuation can...

Bases of Share Valuation Share valuation can be done on the basis of income and asset values. On the basis of income still a share will be entitled to two forms of income. For

Finance 504, What role do primary financial markets play in our economy? Wh...

What role do primary financial markets play in our economy? What role do secondary markets fill? Describe the relationship that exists between financial institutions and financial

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