Ordering Decision with quantity discounts

Inputs
unit cost as a function o
Unit Cost - see table at right
at least
Unit Price
750
0
Sale price for leftovers
300
500
Order Quantity(trial value)
500
1000
Profit Model
1500
Demand(trial value)
700
2000
Units sold at regular price
500
Units sold at disposal price
0
Revenue
375000
Cost
345000
Profit
30000
data table of profit as a function of order quantity(vertical) and demand(horizontal)
30000
300
500
1000
300
500
1000
1500
2000
2500
Model Of Expected Demands
Demand
Probability
ORDER QUANTITY

300
0.1
Expec Profit
300
9000
500
0
1000
0
1500
0
2000
0
2500
0

500
0.15

1000
0.25

nit cost as a function of quantity ordered

unit cost
720
690
675
650
625

mand(horizontal)
1500

2000

25000

1500
0.25

2000
0.15

25000
0.1

Demand for golf clubs

Month

Price
1
2
3
4
5
6
7
8
9
10
11
12

Demand
450
45
300
103
440
49
360
86
290
125
450
52
340
87
370
68
500
45
490
44
430
58
390
68

140
120
100

0.0015117827x^2 - 1.5
f(x) = 5871064.20312913
x^
0.9639571132
f(x)==0.9593292291
- 0.3546312046x + 21
R
R = 0.904442868

80
60
40
20
0
250

300

350

Polynomial
y = 58,71,064.20x-1.91
R = 0.96

400

Demand

0.0015117827x^2 - x^-1.9081537551
1.5468356155x + 439.506432086
= 5871064.20312913
0.9639571132
=0.9593292291
- 0.3546312046x + 211.3146745013
0.904442868

Demand
Polynomial (Demand)
Linear (Demand)
Power (Demand)

350

400

olynomial

8,71,064.20x

450

500

550

Linear
-1.91

Power

y = 0.0015x - 1.5468x + 439.51

y = -0.3546x + 211.31

R = 0.964

R = 0.9044

3546x + 211.31

Profit Model using best fitting power curve for estimating demand
Monetary Inputs
Unit Cost to Produce

250

Decision Variable
Unit price(trial value)

400

Profit Model
Predicted Demand
Total Revenue
Total Cost
Profit

62.92
25167.63
15729.77
9437.859

Unit Price

Profit
9437.859
260
270
280
290
300
310
320
330
340
350
360
370
380
390
400
410
420
430
440
450
460
470
480
490
500
510
520
530
540
550
560

570

Chart Title
12
10
8
Column B
6
4
2
0
250

300

350

400

450

500

550

600

Profit
Unit Price
1432.576
260
2665.889
270
3730.493
280
4651.539
290
5449.859
300
6142.812
310
6744.945
320
7268.507
330
7723.864
340
8119.829
350
8463.924
360
8762.596
370
9021.391
380
9245.097
390
9437.859
400
9603.281
410
9744.501
420
9864.262
430
9964.966
440
10048.72
450
10117.39
460
10172.61
470
10215.84
480
10248.34
490
10271.27
500
10285.64
510
10292.34
520
10292.19
530
10285.91
540
10274.14
550
10257.45
560

Max Profit
Best Price

Max Profit

9437.859
160
170
180
190
200
210
220
230
240
250
260
270
280
290
300
310
320
330
340
350
360
370
380
390
10292.34
400
520
410
420
430
440
450
460
470
10292.34
480
490
500
510
520
530
540
550

10236.37

570

150

200

250

300

350

Two way data table for max profi

Max Profit for different unit cost

Unit Cost
Maximum Profit
Corresponding Unit Price

150
16380.83
#N/A

200
0.00
#N/A

Two way data table for max profit as function of unit cost

it cost

250
0.00
#N/A

300
0.00
#N/A

350
0.00
#N/A

Xe

Xc
625

1000

Constraints
Xe

Xc

C1
C2
C3
C4

40
40
0
0

Total
25
50000
0
15000
25
10000
25
25000

Max

15

18

Max return

27375

C1
C2
C3
C4

50000 <=
25000 >=
25000 >=
25000 <=

50000
15000
10000
25000

Xs

Xm
4000

10000

Constraints
Xs
C1
C2
C3

Min

Xm

Total

50
5
0

100
4
100

Min risk

1200000
60000
300000

62000

Constraints
C1
C2
C3

1200000 <=
60000 >=
1000000 >=

1200000
60000
300000

Xs

Xm
18000

3000

Constraints
Xs
C1
C2
C3

Min

Xm

Total

50
5
0

100
4
100

Min risk

1200000
60000
300000

102000

Constraints
C1
C2
C3

1200000 <=
102000 >=
300000 >=

1200000
60000
300000

Risk
8
153000

Microsoft Excel 16.0 Sensitivity Report

Worksheet: [QM_13-08-2016.xlsx]Investment Advisors
Report Created: 13-08-2016 16:15:57

Variable Cells
Final
Cell Name Value
$A$2 U
800
$B$2 H
1200

Reduced
Cost

Objective Allowable Allowable

Coefficient Increase Decrease
0
3
7
0.5
0
5
1
3.5

Constraints
Final
Shadow
Constraint Allowable Allowable
Cell Name Value
Price
R.H. Side
Increase Decrease
$B$17 C1 U
80000 0.0933333333
80000
60000
15000
$B$18 C2 U
800
0
1000 1.000E+030
200
$B$19 C3 U
700 1.3333333333
700
75
300

H
800

1200

Constraints
U
C1
C2
C3

Max

H
25
1
0.5

Max return

Total
50
80000
0
1000
0.25
700

5
8400

Constraints
C1
C2
C3

80000 <=
800 <=
700 <=

80000
1000
700

Ib

Is
0.3

0.7

Constraints
Ib

Is

Total

C1
C2
C3

1
0.06
1

0
0.1
1

Max

0.06

0.1

Max return

0.3
0.075
1

0.088

Constraints
C1
C2
C3

0.3 >=
0.088 >=
1=

0.3
0.075
1