Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46. Consider the following scenarios: Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Variable Cost/Book $6 $8 $12 $10 $11 Access Price $46 $50 $40 $50 $60 Demand 2,500 1,000 6,000 5,000 2,000 For each of these scenarios, the fixed cost remains $160,000. Use Scenario Manager to generate a summary report that gives the profit for each of these scenarios. d.1 Which scenario yields the highest profit? What is the highest profit? d.2 Which scenario yields the lowest profit? What is the lowest profit
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46. Consider the following scenarios: Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Variable Cost/Book $6 $8 $12 $10 $11 Access Price $46 $50 $40 $50 $60 Demand 2,500 1,000 6,000 5,000 2,000 For each of these scenarios, the fixed cost remains $160,000. Use Scenario Manager to generate a summary report that gives the profit for each of these scenarios. d.1 Which scenario yields the highest profit? What is the highest profit? d.2 Which scenario yields the lowest profit? What is the lowest profit
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section: Chapter Questions
Problem 69P: The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon...
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Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable
Consider the following scenarios:
| Scenario 1 | Scenario 2 | Scenario 3 | Scenario 4 | Scenario 5 | |
| Variable Cost/Book | $6 | $8 | $12 | $10 | $11 |
| Access Price | $46 | $50 | $40 | $50 | $60 |
| Demand | 2,500 | 1,000 | 6,000 | 5,000 | 2,000 |
For each of these scenarios, the fixed cost remains $160,000. Use Scenario Manager to
generate a summary report that gives the profit for each of these scenarios.
d.1 Which scenario yields the highest profit? What is the highest profit?
d.2 Which scenario yields the lowest profit? What is the lowest profit?
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