21. (***) (Microsoft Excel problem). The following figure shows an expanded version of the Excel spreadsheet described in Using Excel in Capacity Management (page 240). In addition to the break-even and indifference points, the expanded spreadsheet calculates financial results for three capacity options under three different demand scenarios. Re-create this spreadsheet in Excel.

You should develop the spreadsheet so that the results will be recalculated if any of the values in the highlighted cells are changed. Your formatting does not have to be exactly the same, but the numbers should be. (As a test, see what happens if you change the “Max. output” and

“Variable cost” for Capacity Option A to 250 units and

$35, respectively. Your new expected value for Capacity Option A should be $14,218.75.)

Transcribed Image Text:

1 2 3 4 5 A B Evaluating Alternative Capacity Options (Enter inputs in shaded cells) Revenue per unit of output: D E F $100.00 Variable cost Capacity per unit of 6 Option Fixed cost output Max. output 7 Option A $0.00 $30.00 200 8 Option B $1,250.00 $15.00 300 9 Option C $4,000.00 $7.50 400 10 Demand 11 Scenario Demand level Probability 12 Low 125 25% 13 14 Medium High 275 55% 425 20% 15 Total: 100% 16 17 *** Indifference Points *** 18 19 Option A 20 21 Option B Option C 22 23 24 ***Break-even point *** Option A Option B Option C 0.00 - 14.71 83.33 177.78 - 366.67 43.24 *** Results for different capacity/demand combinations *** *** Expected 25 Low Medium 26 Option A $8,750.00 $14,000.00 High $14,000.00 value *** $12,687.50 27 Option B $9,375.00 $22,125.00 $24,250.00 $19,362.50 28 Option C $7,562.50 $21,437.50 $33,000.00 $20,281.25