Individual Assignment 6
Individual Assignment 6
Year 1 Sales
$ 20,000
$ 10,000
$ 5,000
Sales Growth
20%
10%
2%
Year 1 Price
$10
$7.5
$5
Price
$5.00
$4.00
$2.50
Unit cost
$1.00
$0.75
$0.40
Fixed cost
$65,000.00
$45,000.00
$25,000.00
Solver
1. For each situation described below, identify the target cell, changing cells, and constraints.
a. I am borrowing $100,000 for a 15-year mortgage. The annual rate of interest is 8
percent. How can I determine my monthly mortgage payment?
b. How should an auto company allocate its advertising budget between different
advertising formats?
c. How should cities transport students to more distant schools to obtain racial balance?
d. If a city has only one hospital, where should it be located?
e. How should a drug company allocate its sales force efforts among their products?
f. A drug company has $2 billion allocated to purchasing biotech companies. Which
companies should they buy?
g. The tax rate charged to a drug company depends on the countr y in which a product is
produced. How can a drug company determine where each drug should be made?
2. Refer to Prodmix.xlsx. Lets say you work for a drug company that produces six different
products at its plant. Production of each product requires labor and raw material. Row 4 in the file
shows the hours of labor needed to produce a pound of each product, and row 5 shows the pounds
of raw material needed to produce a pound of each product. For example, producing a pound
of Product 1 requires six hours of labor and 3. 2 pounds of raw material. For each drug, the
price per pound is given in row 6, the unit cost per pound is given in row 7, and the profit
contribution per pound is given in row 9. For example, Product 2 sells for $11.00 per pound,
incurs a unit cost of $5.70 per pound, and contributes $5.30 profit per pound. The months
demand for each drug is given in row 8. For example, demand for Product 3 is 1,041 pounds.
a. This month, 4,500 hours of labor and 1,600 pounds of raw material are available. How can
Technician A
2
Cannot do
3
Technician B
2.5
3
Cannot do
Technician C
Cannot do
Cannot do
4
Technician D
Cannot do
3.5
Cannot do
Each technician can work up to 120 hours per month. How can the chip manufacturer maximize
its monthly profit? Assume a fractional number of units can be produced.
4. A computer manufacturing plant produces mice, keyboards, and video game joysticks. The perunit profit, per-unit labor usage, monthly demand, and per-unit machine-time usage are given in
the following table:
Profit/unit
Labor usage/unit
Machine time/unit
Monthly demand
Mice
$8
0.2 hour
0.04 hour
15,000
Keyboards
$11
0.3 hour
0.055 hour
29,000
Joysticks
$9
0.24 hour
0.04 hour
11,000
Each month, a total of 13,000 labor hours and 3,000 hours of machine time are available. How
can the manufacturer maximize its monthly profit contribution from the plant?
5. Jason makes diamond bracelets, necklaces, and earrings. He wants to work a maximum of 160
hours per month. He has 800 ounces of diamonds. The profit, labor time, and ounces of diamonds
required to produce each product are as follows. If demand for each product is unlimited, how can
Jason maximize his profit?
Product
Bracelet
Necklace
Earrings
Unit profit
$300
$200
$100