PART 1: Problem Solving

1. The selling price of a particular article is P250 per unit. It has been decided to reduce the price per unit by 2%
of the volume of the sale. Variable cost per unit is P100 and fixed cost is P10,000. Using derivative method
answer the following:

a. Write the TR, TC and Profit functions

Given: V= P100
F = P10,000
p= 250−0.02 x
Where:
V= variable cost
F= fixed cost
p = selling price after discount
x= number of units produced/sold

 Total Revenue (R)

R ( x )= p( x)
R ( x )=(250−0.02 x) x
 Total Cost (C) C ( x )=F +V ( x)
C ( x )=10,000+100 x
 Profit Function
P ( x ) =R ( x ) −C( x )
P ( x ) =( 250−0.02 ) x−(10,000+100 x )
P ( x ) =−0.02 x 2+240 x−10,000

b. Find the break-even point quantity

R ( x )=C( x)
Or P ( x ) =0
−1 (−0.02 x 2+240 x−10,000 )=0
0.02 x 2−240 x +10,000
+¿
2
−¿ √−240 −4 (0.02 x 10000)
x=−(−240) ¿¿
2 x 0.02
+¿
−¿ √ 56,800
x=240 ¿ ¿
0.04
x 1=11958 .19
x 2=41. 82
The smallest breakeven point is at 41.82 or 42 units

c. Find the profit at a sale of 800 units

P ( x ) =−0.02 x 2+240 x−10,000
 P ( 800 )=−0.02(800)2+240( 800)−10,000
P ( 800 )=P 169,200

d. Find the unit to sell to cover the fixed cost

Without discount in the selling price:

F F P 10,000/unit
X= = = =6 6 . 6 7=67 units
CM /unit ( p−V ) (P 250 /unit −P 100 /unit )

Considering the discount of 2% of the volume of the sale

R ( x )=C ( x )
( 250−0.02 x ) x=10,000+100 x
−1 (−0.02 x 2+240 x−10,000 )=0
0.02 x 2−240 x +10,000
+¿
2
−¿ √−240 −4 (0.02 x 10000)
x=−(−240) ¿¿
2 x 0.02
+¿
−¿ √ 56,800
x=240 ¿ ¿
0.04
x 1=11958.19
x 2=41. 82 = 42 units

e. Find the maximum profit

P ( x ) =−0.02 x 2+240 x−10,000
P ( x ) =−0.02 x 2+240 x−10,000
Getting the first derivative P' (x)=−0.04 x+ 240=0
0.04 x 240
=
0.04 0.04
x=6000
Getting the second derivative P' ' ( x )=−0.04
P' ' ( 6000)=−0.04

The second derivative is a negative value; therefore, it is maxima.

Maximum Profit: P ( 6000 )=−0.02(6000) 2+240(6000)−10,000

P ( 6000 )=P 710 , 000

2. The following data are the quantity of diesel gas ordered from 2007 to 2020

Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
 Q, 53 65 74 85 92 105 120 128 144 158 179 195
million L

a. Draw scatter plot to show the trend in the demand for diesel gas. Forecast the number of liter demand
for 2021

Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Demand 53 65 74 85 92 105 120 128 144 158 179 195 198.18
18182

Note: Use the Forecast Function in Excel

b. Show 5-year moving weighted average forecast from 2014 to 2021

5-Year MWA
Year Demand Forecast

2014 105  

2015 120  
 2016 128  

2017 144  

2018 158  

2019 179 139.6666667

2020 195 155.6666667

2021 198.18 172.0666667

( 5 x AT −1 ) + ( 4 x AT −2) + ( 3 x AT −3 )+ ( 2 x A T −4 ) + ( 1 x AT −5 )
FT=
15

3. The following is Philippine Industrial Output data are the quantity of diesel gas ordered from 2007 to 2017

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Index 175 190 132 96 100 78 131 135 154 163 178 170 145 133
to
Output

a. What happened to industrial output in 2019 to 2020

The industrial output from 2019 to 2020 declines with a significant difference of 12.

b. Describe the trends in output throughout the Years 2007 to 2010

It can be observed that the trends in the output throughout 2007 to 2010 is fluctuating. There is
a slight increase in the index from 2007 to 2008 followed by an abrupt decrease observed in the year
2010.

c. What will be the values of the indices if we change base year to 2013?
Note: The Index number of the base year is 100

131 175 131 190

= =
100 X 1 100 X 2
X 1=133.6 X 2=145

………DO

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Old 175 190 132 96 100 78 131 135 154 163 178 170 145 133
Index
X1 X2 X3 X4 X5 X6 100 X7 X8 X9 X10 X11 X12 X13

New 133.6 145 100.7 73.3 76.3 59.5 100 103 117.6 124.4 135.9 129.8 110.7 101.5
Index

Old Index
This formula may also be Used: New index= x 100
Index of the New Base Year

PART 2: Discussion. Discuss the following briefly

Consider that you are going to establish a business. Describe briefly what is the nature of business you want to
establish and enumerate at least three (3) quantitative analyses method learned and how or why it will be
useful.

(Establishing the business, you want. Can’t answer on your behalf. Hehe)