In preparing for the upcoming holiday season, Fresh Toy Company (FTC) designed a new doll called The Dougie that teaches children how to dance. The fixed cost to produce the doll is $100,000. The variable cost, which includes material, labor, and shipping costs, is $34 per doll. During the holiday selling season, FTC will sell the dolls for $42 each. If FTC overproduces the dolls, the excess dolls will be sold in january through a distributor who has agreed to pay FTC $10 per doll. Demand for new toys during the holiday selling season is extremely uncertain. Forecasts are for expected sales of 60,000 dolls with a standard deviation of 15,000. The normal probability distribution is assumed to be a good description of the demand. FTC has tentatively decided to produce 60,000 units (the same as average demand), but it wants to conduct an analysis regarding this production quantity before finalizing the decision.
a. Create a what-if spreadsheet model using formula that relate the values of production quantity, demand, sales, revenue from sales, amount of surplus, revenue from sales ofsurplus, total cost, and net profit. What is the profit corresponding to average demand (60,000 units)?
b. Modeling demand as a normal random variable with a mean of 60,000 and a standard deviation of 15,000, simulate the sales of The Dougie doll using a production quantity of 60,000 units. What is the estimate of the average profit associated with the production quantity of 60,000 dolls? How does this compare to the profit corresponding to the average demand (as computed in part a)?
c. Before making a final decision on the production quantity, management wants an analysis of a more aggressive 70,000-unit production quantity and a more conservative 50,000-unit production quantity. Run your simulation with these two production quantities. What is the mean profit associated with each?
d. Besides mean profit, what other factors should FTC consider in determining a production quantity? Compare the three production quantities (50,000, 60,000. and 70,000) using all these factors. What trade-offs occur? What is your recommendation?
The City of Evansville operated a summer camp program for at-risk youth. Businesses and nonprofit organizations sponsor one or more youth by paying the registration fee f...May 03 2020
of an unknown gas is collected over water at . The total pressure is . What is the molar mass of the collected gas? The vapor pressure of water at is BOOSTER CLASSG...May 14 2021
Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory o...Jun 25 2020
On January 1, 2011, Galaxy Sun Industries acquired a new piece of machinery and a used truck from Acme Equipment Company. Galaxy Sun negotiated a price of $100,000 for bo...May 21 2020
The invisible hand concept suggests that:a. Assuming competition, private and public interests will coincide.b. Big businesses are inherently more efficient than small bu...Apr 23 2021
On January 1, 2017, Rolling Hills Country Club purchased a new riding mower for £18,000. The mower is expected to have an 8-year life with a £2,000 residual value. What j...Apr 22 2020
write a convincing resume format for a seeking a job in an organisation?Aug 22 2020
On the first day of the fiscal year, a company issues a $1,400,000, 10%, 7-year bond that pays semiannual interest of $70,000 ($1,400,000 × 10% × ½), receiving cash of $1...Aug 26 2020
Find the local maximum and minimum values of fusing both the First and Second Derivative Tests. (If an answer does not exist, enter DNE) Rx - x - 5x+7 local maximum value...Apr 25 2021