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!

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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