Problem #4 – The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. If the number of air conditioning units assembled per month follows a normal distribution, calculate the a. probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. , An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from b. $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process improvement initiative. If the number of air conditioning units assembled per month still follows a normal distribution after the implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability, would you change your recommendation? Justify.

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter2: Equations And Inequalities
Section2.7: More On Inequalities
Problem 44E
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hello, I need help with number 4, I provided answer to number 3 

Buse basic concepts of revenue, total Cost
Variable cost ond break even
given cost (variable) = #S00
fixed cost=
a)Suppose freere in c. sell X unit asnd at break even
at break even hoprofit no loss
Total revenue =total cost
1000 x - 250000+So0 x
Soox 250000
x =S00 unit
#250000
bi mon thly revenue at break even
-1000X
=1000(500)- Sooo00 F
%3D
C.monthly variable cost
= s00 X a
= 5o0x 500
250000
d. Total operonthog cost at beeak even
- @ COst of item t fixed cost
=(50ox500) +250000 So0000
e x=l600 unit
profit
- Re venve
to tal cost
(o00x1000)-(( 500x6o+2500o0
$ 50000
Transcribed Image Text:Buse basic concepts of revenue, total Cost Variable cost ond break even given cost (variable) = #S00 fixed cost= a)Suppose freere in c. sell X unit asnd at break even at break even hoprofit no loss Total revenue =total cost 1000 x - 250000+So0 x Soox 250000 x =S00 unit #250000 bi mon thly revenue at break even -1000X =1000(500)- Sooo00 F %3D C.monthly variable cost = s00 X a = 5o0x 500 250000 d. Total operonthog cost at beeak even - @ COst of item t fixed cost =(50ox500) +250000 So0000 e x=l600 unit profit - Re venve to tal cost (o00x1000)-(( 500x6o+2500o0 $ 50000
Problem #2 - The table below shows the total number of air conditioning units sold in whole country by Freeze Inc. from
January to December of 2019:
Month
Actual Sales
3-Month Moving
(# of Product X)
Average Forecast - Sales
(# of Product X)
Jan/19
Feb/19
Mar/19
Apr/19
May/19
Jun/19
Jul/19
Aug/19
Sep/19
Oct/19
1,860
2,040
3,560
4,200
6,250
7,980
10,200
9,800
9,900
9,950
Nov/19
7,890
Dec/19
5,350
Jan/20
5,020
a)
Calculate the 3-month Moving Average Forecast for sales from April/2019 to January/2020 and
enter them in the table above.
b)
Calculate MAD, MSE and MAPE for the forecast obtained from April/2019 to January/2020.
Problem #3 - A Freeze Inc. the manufacturing of each air conditioning has a variable cost of $500 per unit and it takes
place in a facility that has a monthly fixed cost of $250,000.
If Freeze Inc. sells each unit at $1,000, how many units do they need to sell every month to break-even?
What is the monthly revenue at the break-even point?
What is the monthly variable cost at the break-even point?
What is the total operating cost at the break-even point?
If Freeze Inc. sells 600 units at $1,000 each on a given month, calculate the profit.
a.
b.
c.
d.
e.
Page 2 of 3
Problem #4 – The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard
deviation is 100 units.
а.
If the number of air conditioning units assembled per month follows a normal distribution, calculate the
probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point
calculated in problem 3-a.
b.
An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per
unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and
reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from
$250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning
units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process
improvement initiative.
C.
If the number of air conditioning units assembled per month still follows a normal distribution after the
implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a
quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability,
would you change your recommendation? Justify.
Transcribed Image Text:Problem #2 - The table below shows the total number of air conditioning units sold in whole country by Freeze Inc. from January to December of 2019: Month Actual Sales 3-Month Moving (# of Product X) Average Forecast - Sales (# of Product X) Jan/19 Feb/19 Mar/19 Apr/19 May/19 Jun/19 Jul/19 Aug/19 Sep/19 Oct/19 1,860 2,040 3,560 4,200 6,250 7,980 10,200 9,800 9,900 9,950 Nov/19 7,890 Dec/19 5,350 Jan/20 5,020 a) Calculate the 3-month Moving Average Forecast for sales from April/2019 to January/2020 and enter them in the table above. b) Calculate MAD, MSE and MAPE for the forecast obtained from April/2019 to January/2020. Problem #3 - A Freeze Inc. the manufacturing of each air conditioning has a variable cost of $500 per unit and it takes place in a facility that has a monthly fixed cost of $250,000. If Freeze Inc. sells each unit at $1,000, how many units do they need to sell every month to break-even? What is the monthly revenue at the break-even point? What is the monthly variable cost at the break-even point? What is the total operating cost at the break-even point? If Freeze Inc. sells 600 units at $1,000 each on a given month, calculate the profit. a. b. c. d. e. Page 2 of 3 Problem #4 – The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. а. If the number of air conditioning units assembled per month follows a normal distribution, calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. b. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process improvement initiative. C. If the number of air conditioning units assembled per month still follows a normal distribution after the implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability, would you change your recommendation? Justify.
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