Quantitative Analysis for Management - Speech or Presentation Example

But escalates labor cost by 32% that is 4,000 hours out of the total number of 12,500 hours. Then the subsequent mode; is modified model after taking into reconsideration the labor time and corresponding labor cost: Through searching for the maximum profits mainly based on the LP utilizing POM software, the corresponding maximum profits will be $59,900 resulted from the prevailing manufacturing 1,100 units of W00075C, 250 units of W0033C, and 600 units of W0007X (Render & Stair, Hanna, 2012). Moreover, the outcome also depicts of not to produce W0005C product.

Addition of more headcounts within the drawing department will reduce the labor time and increasing the labor cost by 32% (Anderson, 2013). In regard to the outcome from the POM software, the underlying quantity of the will not change (Anderson, 2011). Nevertheless, the change is better but result to less profit of $53,653 since there is no escalation within the pricing but resulting to increase burden thus increasing the cost. In order to attain maximum profits the produce will be 1,100 units of the W0075C, 250 units of W0033C and 600 units of W0007X.

Company ought to reject the orders of producing 1,510 units of the W0005X. Moreover, it will be better for the company not to escalate the underlying number within the drawing department for it to maintain low cost (Anderson, 2011). The model utilized to solve the prevailing problem suffers from the limitation that there are numerous optimal outcomes and a diverse answer might be attained depending on the underlying sequence in which the constraints are normally answered (Anderson, 2013). Yes, alteration by 40% to a relatively higher value would significantly reduce the costs.

This can be depicted by the sensitivity analysis that is changing to 60 makes the cost to be $2,485.83 whilst changing to 80% makes the cost to be $2,382.08. Therefore, as the