Answer Happy

ON EXCEL WITH EQUATIONS
Smart Devices Inc. sells two popular models of wireless
headphones, Model A and Model B. The sales of these two products
are not independent from each other (in economics these products
are called substitute products, because if the price of one
increases the sales of the other increase). A study of price and
sales data shows the following relationships between the quantity
sold (Q) and the prices(P) of each model.
Q(A) = 200 – 0.62P(A) + 0.30P(B)
Q(B) = 290 + 0.10P(A) – 0.60P(B)
Construct a mathematical model that calculates the total
revenue when P(A) = $180 and P(B) = $300
Use a two-way data table to show how the change in price
for both products impacts the revenue. For P(A) use a range from
$150 to $240 with increments of $10 and for P(B) use a range from
$250 to $350 with increments of $10. Based on this table what price
combination yields the highest possible revenue.
Assume that it takes $85 to manufacture Model A and $194
to manufacture Model B. Also assume a fixed cost of $24,500. Update
your current model to calculate the overall profit.
Create the following three scenarios using Scenario
Manager to compare the Profit/Loss
Best Case
Worst Case
Expected Case
Unit cost for model A
$60
$134
$90
Unit cost for model B
$155
$244
$205
Fixed Cost
$32,000
$76,000
$52,000
E. For the model you built in part(c) use Goal
Seek to find the price for Model B what will create profit of
exactly $5,000.