A1 A2 Triple A Company belongs to the industrial cleaning service industry and the following data relates to its operations in 2020. Triple A Company Segmented Income Statement (in USD) For the Year Ended December 31, 2020 COMPREHENSIVE PACKAGED PRODUCTS TOTAL COMPANY A3 Net Sales 1,285,000,000.00 1,100,000,000.00 145,000,000.00 40,000,000.00 Variable Expenses: Service Cost 557,000,000.00 495,000,000.00 58,000,000.00 4,000,000.00 Commissions 316,000,000.00 275,000,000.00 29,000,000.00 12,000,000.00 Total Variable Expenses 873,000,000.00 770,000,000.00 87,000,000.00 16,000,000.00 Contribution Margin 412,000,000.00 330,000,000.00 58,000,000.00 24,000,000.00 Fixed Expenses 182,000,000.00 155,000,000.00 21,000,000.00 6,000,000.00 Net Operating Income $230,000,000.00 $175,000,000.00 $37,000,000.00 $18,000,000.00 Number of service contracts sold 44,000 14,500 16,000 Unit Sales per service contract 25,000.00 10,000.00 2,500.00 Service Cost percentage 45% 40% 10% Commission percentage 25% 20% 30% Contribution Margin percentage 32% 30% 40% 60% Number of sales persons selling all services 200 REQUIREMENT: For 2021, incorporating all the constraints below determine the optimal number of renewed and new service contracts that sales persons should sell per product line in order for the company to increase by 3% its total contribution margin, from 32% to 35% (show separately the number of renewed and new service contracts per product line). Constraints: 1) Number of service contracts sold in 2020 to be renewed in 2021 should not be lower than 80%. 2) 2021 new service contracts should at least be 50% of the renewed service contracts. 3) Each sales person should at least sell 1 new service contract of each product line each month. 4) Each product line contribution margin should be the same or higher in 2021 versus 2020. 5) The Service Cost and Commission percentages per product line in 2021 should be the same as in 2020. Note: Present the solution using Linear Programming and Linear Programming Solver, complete with mathematical equation for the decision variables, objective function, non-negativity, and show the actual solver. A1 A2 Triple A Company belongs to the industrial cleaning service industry and the following data relates to its operations in 2020. Triple A Company Segmented Income Statement (in USD) For the Year Ended December 31, 2020 COMPREHENSIVE PACKAGED PRODUCTS TOTAL COMPANY A3 Net Sales 1,285,000,000.00 1,100,000,000.00 145,000,000.00 40,000,000.00 Variable Expenses: Service Cost 557,000,000.00 495,000,000.00 58,000,000.00 4,000,000.00 Commissions 316,000,000.00 275,000,000.00 29,000,000.00 12,000,000.00 Total Variable Expenses 873,000,000.00 770,000,000.00 87,000,000.00 16,000,000.00 Contribution Margin 412,000,000.00 330,000,000.00 58,000,000.00 24,000,000.00 Fixed Expenses 182,000,000.00 155,000,000.00 21,000,000.00 6,000,000.00 Net Operating Income $230,000,000.00 $175,000,000.00 $37,000,000.00 $18,000,000.00 Number of service contracts sold 44,000 14,500 16,000 Unit Sales per service contract 25,000.00 10,000.00 2,500.00 Service Cost percentage 45% 40% 10% Commission percentage 25% 20% 30% Contribution Margin percentage 32% 30% 40% 60% Number of sales persons selling all services 200 REQUIREMENT: For 2021, incorporating all the constraints below determine the optimal number of renewed and new service contracts that sales persons should sell per product line in order for the company to increase by 3% its total contribution margin, from 32% to 35% (show separately the number of renewed and new service contracts per product line). Constraints: 1) Number of service contracts sold in 2020 to be renewed in 2021 should not be lower than 80%. 2) 2021 new service contracts should at least be 50% of the renewed service contracts. 3) Each sales person should at least sell 1 new service contract of each product line each month. 4) Each product line contribution margin should be the same or higher in 2021 versus 2020. 5) The Service Cost and Commission percentages per product line in 2021 should be the same as in 2020. Note: Present the solution using Linear Programming and Linear Programming Solver, complete with mathematical equation for the decision variables, objective function, non-negativity, and show the actual solver