The problem out of the textbook Spreadsheet Modeling & Decision Analysis (6th Ed
ID: 3142976 • Letter: T
Question
The problem out of the textbook Spreadsheet Modeling & Decision Analysis (6th Edition), Chapter 4 problem 2C titled the Parket Sisters. There is a solution on the site about how to solve the excel chart using the solver however i'm having trouble with the following question.
The R&D Department at Parket Sisters has been redesigning the mechanical pencil to make it more profitable. The new design requires 1.1 ounce of plastic, 2.0 ounces of chrome, and 2.0 ounces of stainless steel. If the company can sell one of these new pencils at a net profit of $3.00, should it approve the new design? Explain your response.
Explanation / Answer
Yes, I would approve the new design because it offers a new product mix,which completely utilizes all of our weekly materials and in turn, generates a higher profit of $2,800. It also gets the mechanical pencils into the mix which allows the company to offer a wider range of products and still be profitable
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