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- Hint(s) Check My Work (All answers were generated using 1,000 trials and native Excel functionality.) The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $300,000. The variable cost for the product is expected to be between $192 and $288, with a most likely value of $240 per unit. The product will sell for $360 per unit. Demand for the product is expected to range from 0 to approximately 20,000 units, with 4,000 units the most likely. (a) Develop a what-if spreadsheet model computing profit for this product in the base-case, worst-case, and best-case scenarios. If your answer is negative, use minus sign. Best-case profit Worst-case profit Base-case profit (b) Model the variable cost as a uniform random variable with a minimum of $192 and a maximum of $288. Model the product demand as 1,000 times the value of a gamma random variable with an…Sigma Company produces high-quality PCs using the just-in-time (JIT) production method. The market has grown significantly overthe pastfew years and is expected to grow continuously. They are planning to launch a new model called “Epic”. The introduction of Epic will have no impact on sales of existing models as it is expected to appeal to a different segment of themarket. The company has already spent Rs.2 million on marketing the new model further requires an investment of Rs.20 million in production equipment. The project has a life of five years and the depreciation is calculated using the straight-line method. Sales and production of the Epic over its lifecycle are expected to be as follows. Year 01 02 03 04 05Units of sales 200 400 500 650 800 The selling price in Year 1 and Year 2 will be Rs. 50,000 per unit. The selling price will be reduced to Rs. 40,000 from year 3. The total variable cost of the Epic, including…A month later, management estimate that if Aqua Marine implements the ERP sys a. $435,000 in software costs ERP system c. $105,000 for employee training The team estimates that the ERP system should provide several benefits: a. More efficient order processing should lead to savings of $105,000. b. Streamlining the manufacturing process so that it maps into the ERP system will cre- ate savings of $125,000. limie c. Integrating purchasing, production, marketing, and distribution into a single system will allow Aqua Marine to reduce inventories, saving $225,000. d. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $155,000.
- Samsung Electronics is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Samsung can make the component inhouse and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and MARR is 12% per year. Neglect the element of availability (a) to determine the breakeven quantity, and (b) to recommend making or buying at the expected usage level. Solve manually please, no Excel <3Sinbo Electronics is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A high-use component can be purchased for $25 per unit with delivery promised within a week. Alternatively, Sinbo can make the component in-house and have it readily available at a material cost of $3 per unit if equipment costing $155,000 is purchased. Labor and other operating costs are estimated to be $45,000 per year over the study period of 5 years. Salvage is estimated at 10% of the first cost, and the interest rate is 10% per year. Which one of the following values is closest to the break-even quantity? Select one: а. 3,789 b. 3,158 с. 6,341 d. 4,404 e. 11,160Premo Pens, Inc., is in the process of developing a newpen to replace its existing top-of-the-line Executive Model.Market research has identified the critical features the pen must have, and it is estimated that customers would be will-ing to pay $30 for a pen with these features. Premo’s produc-tion manager estimates that with existing equipment it will cost $26 to produce the proposed model. The current Execu-tive Model sells for $24 and has a total production cost of $20. A competitor sells a pen similar to the proposed model,but without Premo’s patented easy retract feature, for $28. Itis estimated to cost the competitor $25 to produce. If Premoseeks to earn a 20 percent return on sales on the new model,which of the following represents the target cost for the newpen?a. $26.00.b. $22.40.c. $24.00.d. $19.80.
- Johnson and Gomez, Inc., is a small firm involved in the production and sale of electronic business products. The company is well known for its attention to quality and innovation. During the past 15 months, a new product has been under development that allows users improved access to e- mail and video images. Johnson and Gomez code named the product the Wireless Wizard and has been quietly designing two models: Basic and Enhanced. Development costs have amounted to $204,000 and $285,000, respectively. The total market demand for each model is expected to be 55,000 units, and management anticipates being able to obtain the following market shares: Basic, 30 percent; Enhanced, 25 percent. Forecasted data follow. Projected selling price Per-unit production costs: Direct material Direct labor Variable overhead Projected selling price Per-unit production costs: Direct material Direct labor Variable overhead Marketing and advertising (fixed but avoidable) Sales commissions Basic $ 420.00…Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $156,000. Variable processing costs are estimated to be $9 per book. The publisher plans to sell single-user access to the book for $44. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 – 6p, where p is the price of the e-book. (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars). (b) Use Goal Seek to calculate the price (in dollars) that results in breakeven. (Round your answer to the nearest cent.) (c) Use a data table that varies price…Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $171,000. Variable processing costs are estimated to be $8 per book. The publisher plans to sell single-user access to the book for $41. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 − 6p, where p is the price of the e-book. (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated
- Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $175,000. Variable processing costs are estimated to be $8 per book. The publisher plans to sell single-user access to the book for $54. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,300 copies? For subtractive or negative numbers use a minus sign. -23,200 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue = total cost yielding a profit of zero. In which interval of demand does breakeven occur? (i) Breakeven appears in the interval of 3,400 to 3,600 copies. (ii) Breakeven appears in the…Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cast of manuscript preparation, textbook design, and web-site construction is estimated to be $155,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $47. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,200 copies? For subtractive or negative numbers use a minus sign. -23800 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue - total cost yielding a profit of zero. In which interval of demand does breakeven occur? (1) Breakeven appears in the interval of 3,200 to 3,400 copies. (1) Breakeven appears in the interval…Keith Golding has decided to purchase a personal computer. He has narrowed his choices to two: Brand A and Brand B. Both brands have the same processing speed, hard disk capacity, RAM, graphics card memory, and basic software support package. Both come from companies with good reputations. The selling price for each is identical. After some review, Keith discovers that the cost of operating and maintaining Brand A over a three-year period is estimated to be 200. For Brand B, the operating and maintenance cost is 600. The sales agent for Brand A emphasized the lower operating and maintenance cost. She claimed that it was lower than any other PC brand. The sales agent for Brand B, however, emphasized the service reputation of the product. She provided Keith with a copy of an article appearing in a PC magazine that rated service performance of various PC brands. Brand B was rated number one. Based on all the information, Keith decided to buy Brand B. Required: 1. What is the total product purchased by Keith? 2. Is the Brand A company pursuing a cost leadership or differentiation strategy? The Brand B company? Explain. 3. When asked why he purchased Brand B, Keith replied, I think Brand B offered more value than Brand A. What are the possible sources of this greater value? If Keiths reaction represents the majority opinion, what suggestions could you offer to help improve the strategic position of Brand A?