Question

ABU DHABI POLYTECHNIC Electro Mechanical Engineering Technology Engineering Economics Semester 3, 2018/2019 EMEX-401 Student ID: Student Name: Assignment 2 Answer the following questions. A plant that has a capacity of 7600 pumps per month, and that needs to produce&sell 4960 pumps per month before it starts making profit, can make $2,318,000 per month at full capacity. The variable cost per pump is S180 1. a. Find the fixed cost per month Find the total cost for the plant to work at full capacity. b. What is the maximum profit that can be achieved by this plant per month? c. d. Do you think that decreasing the fixed cost by 5% while increasing the variable cost by 4% will be better or worse for this plant? Justify your answer. Electro Mechanical Engineering Technology Semester 3, 2018/2019 Engineering Economics EMEX-401 Student lDi 스0n1720 | Student Name: Assignment 1 Answer the following questions. The management of a taxi company is under pressure to increase profitability in order to buy 300 new cars to replace its current fleet which is consisting of 300 taxi cars. This is mainly because of the high competition with other taxi companies and because of the increase in the oil price. One proposed solution isto increase the taxi fees by 25% and simultancously apply for a bank loan to replace 150 cars. 1- Formulate the company's problem. a. b. Reformulate the problem in a creative way Give two potential alternatives for your formulated (or reformulated) problems in (a) or (b). (Don't concern yourself with feasibility). c.

Answer 1

assignment 1

(a) company is already running 300 taxi cars and now want to improve the growth and which is possible by buying new oil efficient cars. another problem is to compete with another taxi companies, for that something different or better is required which is not there in another companies.

(b) if any company want a good position in market, it need to be innovative and more attractive for its users which is only possible if it follow new trends of market which are good for its growth. on other hand it is very difficult to shift suddenly from 300 old taxi cars to new ones, as it will require more money and skilled drivers also.

(c) in first case if company sale its all 300 cars and buy some new cars in that money along with bank lone, it can be a option but high risk is there like, whether these cars will make that much profit in starting stage or not and as the no. of cars are reducing, company will only be able to deal with few passengers and it may lose its permanent service users.so if company want to change it should move slowly, like in initial stage it need to replace say 20 cars with new one and by doing so there will be supply of taxi also available and company can also take some lone from bank and by doing so, less load will be on that company.

on other hand if company is increasing 25% fare with old taxi cars, it might be a wrong approach because service user will find low fare with other company and you might lose the loyalty of that passenger.