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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
2
Justify at least three different considerations you looked at while attempting to come up with the most profitable solution. What would go into such a system if you were the owner of the store and your business profits were at stake? Your submission must be a minimum of two pages, double-spaced.
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