Create a chart that plots profit, Strategic Management

Assignment Help:

Excel is often used to perform "what-if" analyses. In these, a model that depends on a number of variables is constructed, and the outcomes predicted by the model are determined for a a range of values of the input variables.  The following matematical model describes the way in which the profit of a trucking company depends on a number of variables, including the price of petrol.

The input variables are:

1. the price of petrol in cents per litre, P;

2. the price the company charges its customers in dollars per km-tonne, T;

3. the volume of business carried out in a year, in km-tonnes, V ;

4. the rate of petrol consumption, R;

5. maintenance costs, in dollars, M;

6. the number of employees, E;

7. the average salary of employees, in dollars per year, S.

The company has no control over the price of petrol. It can decide what it will charge its customers and what the average salary of employees will be.  The volume of business carried out in a year will depend on the price charged to customers. The volume of business will determine the total price of petrol purchased during the year, the maintenance costs and the number of employees. The volume of business is given by

Vid should be the nal four digits of your student number, treated as an integer in the range [0, 9999]. So if your student number is 12345678 you should use,

 

for every 2.5 x 106 km-tonnes, or part thereof. This in turn determines maintenance costs, $12,000 per truck per year, and the number of employees, which is N + 4.

The volume of business also determines the amount of petrol consumed by the company, at the rate (R) of 0.2 litres per km-tonne.

The revenue collected by the company is VT.

The costs incurred by the company are the price paid for petrol, the costs of maintenance, salary costs and overhead costs of $60,000 per year.

The profit is the difference between the revenue and the costs. To perform the "what-if" analyses, you will need to do the following:

(a) Write a VBA function that will calculate the costs incurred by the company given P, T and S.

(b) Create a spreadsheet with cells where the values of T and S can be entered.  Beneath them construct a table with the column headings Price of petrol, Volume of business, Revenue collected, Costs incurred and Profit. In the first column, insert prices going from $1.00 to $2.00 in increments of five cents. Set up formulae in the remaining columns that will perform the required calculations.

(c) Create a chart that plots profit against the price of petrol.

(d) Test the spreadsheet using the values of  T = 0.40 and take the value of S from the first five digits of your student number. So if your student number is 12345678 take S = 12345 as the salary amount to use in your test.


Related Discussions:- Create a chart that plots profit

Advantages of time study, 1. Output standards are easily convertible into...

1. Output standards are easily convertible into labor costs per unit of output. 2. Output standards facilities scheduling and controlling the flow of production thr

How might a company sustain and win a price war, ? A) By including a lower ...

? A) By including a lower cost structure ? B) By cross-subsidizing one business from another ? C) By including "deeper pockets" to fund short to medium term losses

Sanlam, write an essay of approximately 1500 words in which you critically ...

write an essay of approximately 1500 words in which you critically analyse and evaluate the value innovation strategy that sanlam opted for in their 2009 blue star financial advise

Describes a business model , Product flows,  information flows, service flo...

Product flows,  information flows, service flows participants' roles

Find the minimum total cost, A fence enclosure consists of a rectangle of l...

A fence enclosure consists of a rectangle of length L and width 2 R , and a semicircle of radius R , as shown in Figure 1. The enclosure is to be built to have an area of 1600 m

Define managerial process of crafting & executing strategy, Define Manageri...

Define Managerial Process of Crafting & Executing Strategy the managerial ins & outs of crafting & executing company strategies. Special thought is given to management's direc

Dimensions of common national cultures, Hofstede's dimensions of common nat...

Hofstede's dimensions of common national cultures Power distance. Extent to that people accept inequality of power. Uncertainty avoidance. Tolerance for uncertainty o

Comparison of conventional and jit wisdom, Comparison of Conventional and J...

Comparison of Conventional and JIT Wisdom  JIT philosophy Ideal lot size is 1 Balanced production is best Inventory is wasteful Eliminate waste Handle only so

Show the arguments against the controllability principle, Q. Show the Argum...

Q. Show the Arguments against the controllability principle? -  Political arguments may occur over such costs which are more subjective than objective when determining controll

Economic crisis in new member states, Among NMS, we can find various scenes...

Among NMS, we can find various scenes of the economic crisis, ranging from countries with extremely serious crisis to countries with rather milder crisis. These countries can be cl

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd