op singh 1) A manufacturer is considering a new production. The fixed cost is estimated to be $120,000. Variable production and material costs are estimated to be $12 per unit. Demand over this product is estimated to be 5400 units. The company plans to sell to the local shops for $51 each. (15 marks) List of formulas: (15 min) Profit = Revenue - Total cost Revenue = Selling price* volum Total cost = Fixed cost + cost per item * volume Break even volume = (Fixed cost) (selling price -cost per item) a) What is the breakeven point? (4 marks) b) With a demand of 5000 units, what is the price per product that the company must charge to earn $100,000 profit? (5 marks) c) If the marketing department manager believes that the demand can be increased by 15% with the price of $42 per product, what action would you recommend? (i.e. Should they decrease the price to 42?) (6 marks) 2) A teacher of a local community art class has collected information about the number of students attending her class over the past few months as shown below. (20 min) (20 marks) Month Ft+1 = aY, + (1 - a) F & F = Y, MAE 1 2 3 4 Sleil Students 12 15 18 22 24 27 +1 n-k 5 6 a. What are the forecasts for months 4 through 7 using "average of all previous data" model? Round the forecasts to two decimal places. (5 marks) b. With a smoothing factor of 0.3, what are the exponentially smoothed forecasts for months 2 to 7? Round the forecasts to two decimal places. (7 marks) c. Compare the MAE for the "average of all previous data" forecasts for months 4 through 6 to the MAE for the exponential smoothing forecasts for months 4 to 6. (8 marks)