Category: Management

Round Tree Manor Problem
Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows.
Profit per night (dollars)
Rental Class
Super Saver
Deluxe
Business
Room Type I
$30
$35
—
Type II
$20
$30
$40
Round Tree’s management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 150 rentals in the Super Saver class, 50 rentals in the Deluxe class, and 40 rentals in the Business class. Since these are the forecasted demands, Round Tree will take no more than these amounts of each reservation for each rental class.
Round Tree has a limited number of each type of room. There are 100 Type I rooms and 120 Type II rooms.
(a)
Formulate and solve a linear program to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types. (Assume S1 is the number of Super Saver rentals allocated to room type I, S2 is the number of Super Saver rentals allocated to room type II, D1 is the number of Deluxe rentals allocated to room type I, D2 is the number of Deluxe rentals allocated to room type II, B2 is the number of Business rentals allocated to room type II. Write your answers expressing the amount allocated in dollars.)
Report the number of reservations of each type management should accept for each rental class room type combination to maximize profit.
Allocation of reservations
Rental Class
Super Saver
Deluxe
Business
Room Type I
—
Type II
What is the profit (in dollars) obtained through this allocation of room reservations. $
(b)
For the solution in part (a), how many reservations can be accommodated in each rental class?
Super Saver
Deluxe
Business
Is the demand for any rental class not satisfied? If demand materializes as forecast, there will be rooms not reserved in the – Super Saver Deluxe Business class.
Help with part A and B

Perot Corporation is developing a new CPU chip based on a new type of technology. Its new chip, the Patay chip, will take two yearsto develop. However, because other chip manufacturers will be able to copy the technology, it will have a market life of two years afterit is introduced. Perot expects to be able to price the chip higher in the first year, and it anticipates a significant production costreduction after the first year. The relevant information for developing and selling the Patay2 is given as follows:
Assume all cash flows occur at the end of each period.
What are the yearly cash flows and their present value (discounted at 10 percent) of this project? What is the net present value?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediatecalculations. Negative value should be indicated by a minus sign.
Answer is complete but not entirely correct.
Net present value $ 8,125
Perot’s engineers have determined that spending $10 million more on development will allow them to add even more advancedfeatures. Having a more advanced chip will allow them to price the chip $50 higher in both years ( $870 for year 1 and $700 for year2). What is the NPV of the project if this option is implemented?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediatecalculations. Negative value should be indicated by a minus sign.
Answer is complete but not entirely correct.
Net present value17,175
If sales are only 256,000 the first year and 128,000 the second year, what would the NPV of the project be? Assume thedevelopment costs and sales price are as originally estimated?
Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediatecalculations. Negative value should be indicated by a minus sign.
Answer is complete but not entirely correct.
Can you please use Excel to answer these?

PromotionThe Marketing in 5 Part Harmony team has traditionally emphasized more in the direct contact with the target segment, from the thought that to “get what we do, you need to experience our product.” The current social change business owner/entrepreneur is more involved in the digital marketing arena so the team found a need to feature the lifestyle and healthy behavior change aspects and direction of its target market. To increase brand awareness and visibility in the digital marketing realm, the team developed an “edutainment” style campaign to highlight the unique nature of impacting healthy behavior change. The edutainment campaign would be geared toward emphasizing the social and healthy change aspect in the promotions to connect with the specific needs of the segment. PriceTo ensure effective strategies for value pricing that factor in the product’s actual cost in relation to the perceived value of the product, the team would need to find a price point that makes the product appealing to the segment, as well as profitable for the Harmony team. The price would need to reflect similar costs already being incurred by this segment for similar products and how it will meet their needs. Since the product will address the segment’s lack of marketing expertise and personnel, as well as their potential misconception of marketing as an effective activity for them the price needs to reflect a stronger value for the money. 3. Activity Please answer the following questions related to the above scenario.When considering value pricing for a product, you shouldMultiple Choicecalculate the actual costs of the production of the product and add the standard industry markup.price it at the low end to maximize sales since it is a product that can be generated online.price it just above your competitors’ prices to create higher value.consider production costs, industry pricing standards, and how the customer will perceive the benefits of the product in meeting their needs.None of these answers are correct.

Nordlund Boat Company has been repairing, refitting, and building custom boats in the Pacific Northwest for over 60 years. One of the engine’s most critical components is the exhaust manifold, and TJ, as the buyer in charge, plays a pivotal role in managing this item. The company purchases this item from the best manufacturers in the world, which is a testament to our commitment to quality.
Under the current ordering practice, TJ’s purchasing agent submits an order for the exhaust manifold every 4 weeks, aligning with the company’s monthly demand of 50 units (2 units per working day). Despite its low volume, Nordlund emphasizes quality over quantity discounts, ensuring its commitment to delivering top-notch products. The supplier’s commitment to deliver within one week of order placement has ensured that Nordlund never experiences a shortage, a key factor in the company’s inventory management.
Accounting has generated the following inventory-related costs. The procurement costs are $50 per order, including labor, transportation, receiving, inspection, and moving costs. The holding cost is $20 per item per year, considering storage, damage, insurance, taxes, etc. The company president has assigned TJ, who recently graduated with an MBA, the responsibility of conducting a thorough assessment of the exhaust manifold procurement process, focusing on enhancing supply chain efficiencies. This directive highlights the potential for substantial cost savings, which is crucial for ensuring the company’s financial well-being.
DISCUSSION QUESTIONS (MAKE NO ASSUMPTIONS). (Keep two decimals)
How many units are ordered under the current practice?
What is the total annual inventory cost of ordering LCDs every 4 weeks?
What is the annual inventory cost if orders are released according to the optimal order quantity model?
What potential cost savings can be achieved by ordering every 4 weeks vs. the optimal quantity model?
What is the LCD’s (ROP) reorder point?

Analytics Exercise 20-4 (Algo)Big10Sweaters.com is a new company started last year by two recent college graduates.
The idea behind the company was simple. It will sell premium logo sweaters for Big Ten colleges with one major, unique feature. This unique feature is a special large monogram that has the customer’s name, major, and year of graduation. The sweater is the perfect gift for graduating students and alumni, particularly avid football fans who want to show support during the football season. The company is off to a great start and had a successful first year while selling to only a few schools. This year it plans to expand to a few more schools and target the entire Big Ten Conference within three years.
You will allocate your aggregate order to the Individual schools based on thelr expected percentage of total demand. You discussedyour analysis with Rhonda and Steve and they are OK with your analysls. They would like to see what the order quantitles would be ifeach school was considered individually.
You are curious as to how much Rhonda and Steve made In their business last year. You do not have all the data, but you know thatmost of thelr expenses relate to buying the sweaters and having them monogrammed. You know they pald themselves $50,000 eachand you know the rent, utilitles, Insurance, and a benefit package for the business was about $17,000.They are paying you $42,000 and you expect your benefit package addition would be about $1,000 per year. Assume that they orderbased on the aggregate forecast.
a. What is the expected pre-tax profit for this year, after deducting salary and overhead? Use average forecast for each school.Assume sales materlalize per the average forecasts and the entire safety stock amount (computed based on aggregate demand)must be sold on eBay.Note: Round your answer to the nearest dollar amount.
b. If they must pay 50% in taxes after deducting thelr venture capital firm payment, how much do you expect thelr business cash toIncrease this year?Note: Round your answer to the nearest dollar amount.