Quantitive Methods

1. Schmaltz Ltd.: the first question in Assignment #1). Use the Excel Goal Seek to answer the following questions, and submit your printout.

• What production level would ensure that Schmaltz's monthly profit is equal to their fixed cost?
• How many cases must Schmaltz produce each month if their monthly profit must be at least 40% of the revenue?

2. A company that produces cleaning products is considering a proposal to begin production of a new detergent that would cost $1 a bottle to make and distribute, and retail for $2.19 a bottle. Fixed cost for the operation would be $3000 a week. Assume that all output can be sold.

(a) What would be the total cost, revenue and profit for a weekly volume of 10.000 bottles?

(b)What is the break-even volume?

(c)Set the problem in Excel, and use Goal Seek to confirm your answer in parts (a) and (d)Suppose the company has a goal to make a weekly profit that is at least 25% of the revenue. What level of output satisfies this goal? Use the Excel Goal Seek to answer this question, and submit your printout.

(e)Suppose the weekly demand for the new product is 3,500 bottles, that is, the company could only make and sell 3,500 bottles each wee. Given the same fixed cost and retail price, how low should the variable cost be to realize the same goal in

part (d).

3. Yoshi Yamamura sells silk-screened I-shirts at the multi-culture festival. She estimates that she can sell 600 T-shirts during the weeklong event if she charges $18 each. She also estimates that 750 T-shirts can be sold if she charges only $15 each.

(a) Assuming that the demand is linear; determine the demand function that relates the number of T-shirts sold, g, to the price p dollars.

#3. Yo price p

(b) Suppose that the supply function of Yoshi's silk-screened

T-shirts is described by

S: q = 45 p - 20

Determine the market equilibrium price and quantity.

(c) Sketch a graph of the demand and supply function, and identify the market equilibrium point.

S

(d) Set the problem in Excel and use Goal Seek to confirm your answer in part (b).

1. Schmaltz Ltd.: the first question in Assignment =1). Use the Excel Goal Seek to answer the following questions, and submit your printout. (a) What production level would ensure that Schmaltz's monthly profit is equal to their fixed cost? (b) How many cases must Schmaltz produce each month if their monthly profit must be at least 40% of the revenue? 2. A company that produces cleaning products is considering a proposal to begin production of a new detergent that would cost $1 a bottle to make and distribute, and retail for $2.19 a bottle. Fixed cost for the operation would be $3000 a week. Assume that all output can be sold. (a) What would be the total cost, revenue and profit for a weekly volume of 10,000 bottles? (b) What is the break-even volume? (c) Set the problem in Excel, and use Goal Seek to confirm your answer in parts (a) and (b). (d) Suppose the company has a goal to make a weekly profit that is at least 25% of the revenue. What level of output satisfies this goal? Use the Excel Goal Seek to answer this question, and submit your printout. (e) Suppose the weekly demand for the new product is 3,500 bottles, that is, the company could only make and sell 3,500 bottles each week. Given the same fixed cost and retail price, how low should the variable cost be to realize the same goal in part (d). 3. Yoshi Yamamura sells silk-screened T-shirts at the multi-culture festival. She estimates that she can sell 600T shirts during the weeklong event if she charges $18 each. She also estimates that 750T-shirts can be sold if she charges only $15 each. (a) Assuming that the demand is linear; determine the demand function that relates the number of T-shirts sold, q, to the price p dollars. (b) Suppose that the supply function of Yoshi's silk-screened T-shirts is described by S:q=45p20 Determine the market equilibrium price and quantity. (c) Sketch a graph of the demand and supply function, and identify the market equilibrium point. \#3. Yoshi's T-Shirts price per unit = equilibrium price (d) Set the problem in Excel and use Goal Seek to confirm your answer in part (b)