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Managerial Report Perform

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    Both manufacturing lines are in operation one 8-hour shift per day. Managerial Report Perform an analysis for Digital Imaging in order to determine how many units of each printer to produce. Prepare a report to Dell’s president presenting your findings and recommendations. Include (but do not limit your discussion to) a consideration of the following: 1 . The recommended number of units of each printer to produce to maximize the total contribution to profit for an 8- hour shift. What reasons might management have for not implementing your recommendation? 2. Suppose that management also states that the number of

    ODL-91 0 printers produced must be at least as great as the number of ODL-950 units produced. Assuming that the objective is to maximize the total contribution to profit for an 8-hour shift, how many units of each printer should be produced? 3. Does the solution you developed in part (2) balance the total time spent on line 1 and the total time spent on line 2? Why might this balance or lack of it be a concern to management? 4. Management requested an expansion of the model in part (2) that would provide a better balance between the total time on line 1 and the total time on line 2.

    Management wants to limit the difference between he total time on line 1 and the total time on line 2 to 30 minutes or less. If the objective is still to maximize the total contribution to profit, how many units of each printer should be produced? What effect does this workload balancing have on total profit in part (2)? 5. Suppose that in part (1) management specified the objective of maximizing the total number of printers produced each shift rather than total profit contribution. With this objective, how many units of each printer should be produced per shift?

    What effect does this objective have on total profit and workload balancing? For each solution that you develop, include a copy of your linear programming model and graphical solution in the appendix to your report. Case Problem 3 PRODUCTION STRATEGY Better Fitness, Inc. (FBI), manufactures exercise equipment at its plant in Freeport, Long Island. It recently designed two universal weight machines for the home exercise market. Both machines use FBI-patented technology that provides the user with an extremely wide range of motion capability for each type of exercise performed.

    Until now, such capabilities have been available only on expensive weight machines used primarily by physical therapists. At a recent trade show, demonstrations of the machines resulted in significant dealer interest. In fact, the number of orders that FBI received at the trade show far exceeded its manufacturing capabilities for the current production period. As a result, management decided to begin production of the two machines. The two machines, which FBI named the Body’s 1 00 and the Body’s 200, require different amounts of resources to produce. The Body’s 100 consists of a frame unit, a press station, and a peck-DCE station.

    Each frame produced uses 4 hours of machining and welding time and 2 hours of painting and finishing mime. Each press station requires 2 hours of machining and welding time and 1 hour of painting and finishing time, and each peck-DCE station uses 2 hours of machining and welding time and 2 hours of painting and finishing time. In addition, 2 hours are spent assembling, testing, and packaging each Body’s 100. The raw material costs are $450 for each frame, $300 for each press station, and $250 for each peck-DCE station; packaging costs are estimated to be $50 per unit.

    The Body’s 200 consists of a frame unit, a press station, a peck-DCE station, and a leg press station. Each frame produced uses 5 hours of machining ND welding time and 4 hours of painting and finishing time. Each press station requires 3 hours machining and welding time and 2 hours of painting and finishing time, each peck-DCE station uses 2 hours of machining and welding time and 2 hours of painting and finishing time, and each leg press station requires 2 hours of machining and welding time and 2 hours of painting and finishing time. In addition, 2 hours are spent assembling, testing, and packaging each Body-Plus 200.

    The raw material costs are $650 for each frame, $400 for each press station, $250 for each peck-DCE station, and $200 for each leg-press station; snacking costs are estimated to be $75 per unit. For the next production period, management estimates that 600 hours of machining and welding time, 450 hours of painting and finishing time, and 140 hours of assembly, testing, and packaging time will be available. Current labor costs are $20 per hour for machining and welding time, $1 5 per hour for painting and finishing time, and $12 per hour for assembly, testing, and packaging time.

    The market in which the two machines must compete suggests a retail price of $2400 for the Body’s 100 and $3500 for the Body’s 200, although some flexibility may be available to FBI cause of the unique capabilities of the new machines. Authorized FBI dealers can purchase machines for 70% of the suggested retail price. Bi’s president believes that the unique capabilities of the Body’s 200 can help position FBI as one of the leaders in high-end exercise equipment. Consequently, he has stated that the number of units of the Body Plus 200 produced must be at least 25% of the total production.

    Managerial Report Analyze the production problem at Better Fitness, Inc. , and prepare a report for Bi’s president presenting your findings and recommendations. Include (but do to limit your discussion to) a consideration of the following items: 1. What is the recommended number of Body’s 100 and Bodysuits 200 machines to produce? 2. How does the requirement that the number of units of the Body’s 200 produced be at least 25% of the total production affect profits? 3. Where should efforts be expended in order to increase profits? Include a copy of your linear programming model and graphical solution in an appendix to your report.

    Case Problem 4 HART VENTURE CAPITAL Hart Venture Capital (HAVE) specializes in providing venture capital for software development and Internet applications. Currently HAVE has two investment opportunities: (1) Security Systems, a firm that needs additional capital to develop an Internet security software package, and (2) Market Analysis, a market research company that needs additional capital to develop a software package for conducting customer satisfaction surveys. In exchange for Security Systems stock, the firm has asked HAVE to provide $600,000 in year 1 , $600,000 in year 2, and $250,000 in year 3 over the coming three-year period.

    In exchange for their stock, Market Analysis has asked HAVE to provide $500,000 in year 1, $350,000 n year 2, and $400,000 in year 3 over the same three-year period. HAVE believes that both investment opportunities are worth pursuing. However, because of other investments, they are willing to commit at most $800,000 for both projects in the first year, at most $700,000 in the second year, and $500,000 in the third year. HVAC’s financial analysis team reviewed both projects and recommended that the company’s objective should be to maximize the net present value of the total investment in Security Systems and Market Analysis.

    The net present value takes into account the estimated value of the stock at the end of the three- ear period as well as the capital outflows that are necessary during each of the three years. Using an 8% rate of return, HVAC’s financial analysis team estimates that 100% funding of the Security Systems project has a net present value of and 100% funding of the Market Analysis project has a net present value of $1 HAVE has the option to fund any percentage of the Security Systems and Market Analysis projects.

    For example, if HAVE decides to fund of the security systems project, investments of $240,000 would be required in year 1, = $240,000 would be required in year 2, and = $100,000 would be required in year 3. In this case, the net present value of the Security Systems project would be 0. 40($1 = $720,000. The investment amounts and the net present value for partial funding of the Market Analysis project would be computed in the same manner. Managerial Report Perform an analysis of HVAC’s investment problem and prepare a report that presents your findings and recommendations.

    Include (but do not limit your discussion to) a consideration of the following items: 1 . What is the recommended percentage of each project that HAVE should fund and the net present value of the total investment? 2. What capital allocation plan for Security Systems and Market Analysis for the coming three-year period and the total HAVE investment each year would you recommend? 3. What effect, if any, would HVAC’s willingness to commit an additional $100,000 during the first year have on the recommended percentage of each project that HAVE should fund? What would the capital allocation plan look like if an additional $100,000 is made available? 5. What is your recommendation as to whether HAVE should commit the additional $100,000 in the first year? Provide model details and relevant computer output in a report appendix. Sensitivity Analysis Case Problem 5 INVESTMENT STRATEGY J. D. Williams, Inc. , is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that recommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund, and a money market fund.

    To maintain diversity in each client’s portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund must be between ND 40% of the total portfolio value. Similar percentages for the other two funds stipulate that between 20% and 50% of the total portfolio value must be in the income fund, and at least 30% of the total portfolio value must be in the money market fund.

    In addition, the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, Williams just contracted with a new client who has $800,000 to invest. Based on an evaluation of the client’s risk tolerance, Williams assigned a maximum risk index of 0. 05 for the client. The firm’s risk indicators show the risk of the growth fund at 0. 10, the income fund at 0. 07, and the money market fund at 0. 01.

    An overall portfolio risk index is computed as a weighted average of the risk rating for the three funds where the weights are the fraction of the client’s portfolio invested in each of the funds. Additionally, Williams is currently forecasting annual yields of 18% for the growth fund, 12. 5% for the income fund, and 7. 5% for the money market fund. Based on the information provided, how should the new client be advised to allocate the $800,000 among the growth, income, and money market funds? Develop a linear programming model that will provide the maximum yield for the portfolio.

    Use your model to develop a managerial report. Managerial Report 1. Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation? 2. Assume that the client’s risk index could be increased to 0. 055. How much would the yield increase and how would the investment recommendation change? 3. Refer again to the original situation where the client’s risk index was assessed to be 0. 05. How would your investment commendation change if the annual yield for the growth fund were revised downward to 16% or even to 14%? . Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? 5. The asset allocation model you developed may be useful in modifying the portfolios for all of the firm’s clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible?

    Managerial Report Perform. (2018, May 11). Retrieved from https://graduateway.com/mutual-fund/

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