4a. Break even quantity = Fixed costs/(sale price per unit - variable cost per unit)
= $25,000/($1 per pen - $0.37 per pen)
= $25,000/$0.63 per pen
= 39,682.54 pens. (This can be rounded off to 39,683 pens)
b. Now estimated demand = 30,000 and monthly profit required = $15,000. Let the price be $x per pen
Hence total revenue = 30,000x and total cost = 25000+(0.37*30000)
Profit = revenue - costs
= 30,000x - 25000-(0.37*30000)
Thus 30,000x - 25000-(0.37*30000) = 15000
or 30,000x = 51,100
or x = 51,100/30,000
$1.70 per pen
Problem 3. After plotting demand for four periods, an emergency room manager has concluded that a...
3-10 After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based on the net change of 30 for the three periods from 1 to 4, for an average of +10 units. Period Actual Period Actual 1 215 6 270 2 224 7 277 3 221 8 271 4 245 9 288 5 257 10 Use α=.5 and β=.1, and...
After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based on the net change of 27 for the three periods from 1 to 4, for an average of +9.00 units. Period Actual Period Actual 1 206 6 263 2 233 7 278 3 228 8 288 4 233 9 293 5 253 10 Use α=.50 and β=.10, and TAF...