BEP model for Excel exercise

Sara is thinking of opening a copy shop and needs to decide how many copier to
lease. It costs Rs. 35,000 to lease a copier for a year. Operating the copier costs
Rs. 0.14 per copy for paper, ink and other variable expenses. Fixed cost for rent
and store operations add up to 2100 per month. Sara plans to charge customer
0.77 per copy. The store will be open year around (365 days) & each Copier can
make up to 1,00,000 copies per year (i.e. 100000/365 per day).
The Copy shop’s revenue depends on the daily demand for the copies (i.e. the
total number of copies that arriving customers will want to make) and the
available copier capacity. If all available copier are fully utilized in a day any excess
demand is lost i.e. customers will go to a competing copy shop. Sara thinks that
the daily demand will be stable (i.e. assume that demand on every day of year will
be the same or very close to the daily average) but she is not sure what value this
demand will take. She thinks that the daily demand can take one of 4 possible
values 500, 1000, 1500 or 2000 copies per day.
Develop a spreadsheet model to address the following questions:
1) Provide a Mathematical model formulation to evaluate the profit for a
given daily demand and a given number of copiers leased. Be sure to clearly
define and use general notation (not specific numbers) and write equations
to calculate the outputs (and any intermediate quantities).
2) To determine the “optimum” number of copiers to lease, sara wants to
evaluate profits as the number of copiers increase from one to six each of
these six options compute annual profit for each value of daily demand
(500, 1000, 1500, 2000 copiers per day).