I need to know how to calcuate the maximum profit in this question. If you are u
ID: 3110987 • Letter: I
Question
I need to know how to calcuate the maximum profit in this question. If you are using Excel, please list down the steps to calculate this...thanks
Here is the question:
The owner of a hardware store wants to design a decision support system to predict how many and which type of nails she should sell and what information she needs to do so. The scenario is described below:
Consider that you offer six types of nails and can make as many as you need of each. These are:
4-inch nails
3.5-inch nails
3-inch nails
2.5-inch nails
2-inch nails
1.5-inch nails
The cost of making each type of nail depends on the size of the nail. The costs and selling prices are listed in the table below, along with the weights. The nails will be sold in boxes of up to 30. There must be no more than 10, but no less than five, of each of three types of nails in each box. The nails in each box should weigh no more than 20 ounces. You’re looking for the combination with the highest profit using a trial-and-error method. A spreadsheet would be helpful for completing this project. You’ll most likely find that you identify some promising paths to follow right away and will concentrate on those to reach the best one.
NAIL
WEIGHT (in ounces)
COST (in cents)
SELLING PRICE (cents)
4-inch
1.00
4.0
8
3.5-inch
0.85
3.5
6
3-inch
0.70
3.0
5
2.5-inch
0.50
2.5
4
2-inch
0.25
2.0
3
1.5-inch
0.10
1.5
NAIL
WEIGHT (in ounces)
COST (in cents)
SELLING PRICE (cents)
4-inch
1.00
4.0
8
3.5-inch
0.85
3.5
6
3-inch
0.70
3.0
5
2.5-inch
0.50
2.5
4
2-inch
0.25
2.0
3
1.5-inch
0.10
1.5
Explanation / Answer
First ,you prepare columns in excel as nail combination, no.of nails of 4 inch, no.of nails of 3.5,......like all nails,next column weights, cost, selling price,profit.
Next conditions each box should have 3 types of nails and min of each type is 5 and max is 10... so the box contains 15 to 30 nails...take 3 nailscombination and calculate profit.... and change no .of nails for each combination
Next, change the combination and again change no.of nails in each type every time.... and next change combination and so on... remember weight condition also
There are 6 types and box contains only 3 types hence you get 20 combinations ... calculate profit for all combinations... then see which is getting maximum profit...