Sprout has created a unique market offering by integrating its programs with both children and parents. This unique offering tha
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Answer:
Assume: only one of the ware house expansion projects can be implemented and suppose that, if test marketing of the new product is carried out, the advertising campaign also must be conducted and vice versa. Also suppose that the purchase of new equipment cannot be undertaken unless the basic research or the extensive warehouse expansion are implemented.
Formulate the corresponding model for maximizing the net present value subject to the restrictions stated above
Yi (1 if investment alternative is selected, o otherwise)
i = 1, 2, 3, 4, 5, 6
Max Z = $4,000y1 + 6,000y2 + 10,500y3 + 4,000y4 + 8,000y5 + 3,000y6
∴ NPV = 17,500
Solution :
The price per trip is given as
The number of trips is given as = 800
The total cost calculations are as follows :
Particulars Amount Calculations
Annual cost for automobile van $ 18,000
Cost of driver salary $ 80,000 45000 + 35000
Cost of fringe benefits $ 24,000 80000 x 30%
Cost of insurance $ 2,000
Fuel and maintenance $ 8,000
Total cost $ 132,000.00
Therefore the price per trip