Question

In: Statistics and Probability

Scenario: A bicycle manufacturer produces a racing bicycle and a commuting bicycle. Long-term projections indicate a...

Scenario: A bicycle manufacturer produces a racing bicycle and a commuting bicycle. Long-term projections indicate a minimum expected demand of at least 100 racing and 80 commuting bicycles each day. However, they can produce no more than 200 racing and 170 commuting bicycles each day. To satisfy a shipping contract, they must produce a total of at least 200 bicycles each day. If each racing bicycle sold results in a $20 loss, but each commuting bicycle produces a $50 profit, how many of each type should they make daily to maximize net profits?

1. Analyze in Excel using the Solver Add-in and

2. Please Upload your Excel spreadsheet with the solution.

Thank you!

Solutions

Expert Solution

Answer:-

Given That:-

Scenario: A bicycle manufacturer produces a racing bicycle and a commuting bicycle. Long-term projections indicate a minimum expected demand of at least 100 racing and 80 commuting bicycles each day. However, they can produce no more than 200 racing and 170 commuting bicycles each day. To satisfy a shipping contract, they must produce a total of at least 200 bicycles each day. If each racing bicycle sold results in a $20 loss, but each commuting bicycle produces a $50 profit, how many of each type should they make daily to maximize net profits?

1. Analyze in Excel using the Solver Add-in and

2. Please Upload your Excel spreadsheet with the solution.

Given,

No of racing bicycles = 100

No of commuting bicycles = 170

WORKING

Racing Bicycle Commuting Bicycle Objective function
Maximize
Units produced 100 170
Profit per Unit -20 50
Total Profit -2000 8500 6500
Constraints
Number of racing bicycles 100 100 200
Number of commuting bicycles 80 170 170
Total 270 200

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