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Howie Jones, the owner of Blue Ridge Hot Tubs, is facing a new problem. Although sales of the two hot tubs manufactured by his company
Howie Jones, the owner of Blue Ridge Hot Tubs, is facing a new problem. Although sales of the two hot tubs manufactured by his company AquaSpas and HydroLuxes have been brisk, the company is not earning the level of profits that Howie wants to achieve. Having established a reputation for high quality and reliability, Howie believes he can increase profits by increasing the prices of the hot tubs. However, he is concerned that a price increase might have a detrimental effect on demand, so Howie has engaged a marketing research firm to estimate the level of demand for AquaSpas and HydroLuxes at various prices. The marketing research firm used the technique of regression analysis to develop a model of the relationship between the prices and demand for the hot tubs. After analyzing the situation, the marketing research firm concluded that a reasonable price range for the hot tubs is between $ and $ and that within this range, Howie can expect the demand for hot tubs in the next quarter to vary with price in the following way: Demand for AquaSpas x price of AquaSpas Demand for HydroLuxes x price of HydroLuxes Howie determined that the costs of manufacturing AquaSpas and HydroLuxes are $ and $ per unit, respectively. Ideally, he wants to produce enough hot tubs to meet demand exactly and carry no inventory. Each AquaSpa requires one pump, nine hours of labor, and feet of tubing; each HydroLux requires one pump, six hours of labor, and feet of tubing. Howie's suppliers have committed to supplying him with pumps and feet of tubing. Also, hours of labor are available for production. Howie wants to determine how much to charge for each type of hot tub and how many of each type to produce. Formulate an NLP model for this problem.
Howie Jones, the owner of Blue Ridge Hot Tubs, is facing a new problem. Although sales of the two hot tubs manufactured by his company AquaSpas and HydroLuxes have been brisk, the company is not earning the level of profits that Howie wants to achieve. Having established a reputation for high quality and reliability, Howie believes he can increase profits by increasing the prices of the hot tubs.
However, he is concerned that a price increase might have a detrimental effect on demand, so Howie has engaged a marketing research firm to estimate the level of demand for AquaSpas and HydroLuxes at various prices. The marketing research firm used the technique of regression analysis to develop a model of the relationship between the prices and demand for the hot tubs. After analyzing the situation, the marketing research firm concluded that a reasonable price range for the hot tubs is between $ and $ and that within this range, Howie can expect the demand for hot tubs in the next quarter to vary with price in the following way:
Demand for AquaSpas x price of AquaSpas
Demand for HydroLuxes x price of HydroLuxes
Howie determined that the costs of manufacturing AquaSpas and HydroLuxes are $ and $ per unit, respectively. Ideally, he wants to produce enough hot tubs to meet demand exactly and carry no inventory. Each AquaSpa requires one pump, nine hours of labor, and feet of tubing; each HydroLux requires one pump, six hours of labor, and feet of tubing. Howie's suppliers have committed to supplying him with pumps and feet of tubing. Also, hours of labor are available for production. Howie wants to determine how much to charge for each type of hot tub and how many of each type to produce.
Formulate an NLP model for this problem.
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