The Reeves twins are in the yard maintenance business. They want to start doing snow removal during the winter season because they practically don't have any yards to maintain. The twins are trying to determine how much equipment they need to purchase. The twins plan to do most of the work themselves and then hire some part-time workers on an individual job basis to help out. The twins gathered some data on past weather. Based on the information, they predict that there will be six big snowstorms in the coming winter. Most of their clients want the snow removed no more than two days after the snow stops falling. If the twins work for 10 hours a day, they can remove the snow from the driveway of a home in about 1 hour. However, for commercial parking lots and public sidewalks, it will take 4 hours. The variable cost per job is $12 for home driveways and $47 for commercial parking lots. The twins estimated that they will have no more than 40 homeowners and 25 businesses who would like to have snow removed. The twins are planning to charge $35 for a home driveway and $120 for commercial parking lots. The twins believe they can get more clients because this is less than the prices their current competitors are charging. The twins would like to know how many jobs of each type will maximize their profit. 2.1) Will the twins make money if they pay $3700 for the equipment? Explain your answer 2.2) The twins estimated that they can increase their demand to 55 home driveways and 32 commercial lots if they reduce their prices to $30 for a home driveway and $100 for a commercial parking lot. How do you think this will affect their possible profit? 2.3) If the twins hire more people, it will increase their variable cost to $16 per home driveway and $53 for commercial parking lots. However, this will also decrease the time it would take to clear the home driveway to 40 minutes for home and 3 hours for commercial lots. How do you think this will affect their profit?
The Reeves twins are in the yard maintenance business. They want to start doing snow removal during the winter season because they practically don't have any yards to maintain. The twins are trying to determine how much equipment they need to purchase. The twins plan to do most of the work themselves and then hire some part-time workers on an individual job basis to help out.
The twins gathered some data on past weather. Based on the information, they predict that there will be six big snowstorms in the coming winter. Most of their clients want the snow removed no more than two days after the snow stops falling. If the twins work for 10 hours a day, they can remove the snow from the driveway of a home in about 1 hour. However, for commercial parking lots and public sidewalks, it will take 4 hours.
The variable cost per job is $12 for home driveways and $47 for commercial parking lots. The twins estimated that they will have no more than 40 homeowners and 25 businesses who would like to have snow removed. The twins are planning to charge $35 for a home driveway and $120 for commercial parking lots. The twins believe they can get more clients because this is less than the prices their current competitors are charging. The twins would like to know how many jobs of each type will maximize their profit.
2.1) Will the twins make money if they pay $3700 for the equipment? Explain your answer
2.2) The twins estimated that they can increase their demand to 55 home driveways and 32 commercial lots if they reduce their prices to $30 for a home driveway and $100 for a commercial parking lot. How do you think this will affect their possible profit?
2.3) If the twins hire more people, it will increase their variable cost to $16 per home driveway and $53 for commercial parking lots. However, this will also decrease the time it would take to clear the home driveway to 40 minutes for home and 3 hours for commercial lots. How do you think this will affect their profit?
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