JOHN CEDRIC DE ASIS

QUANTITATIVE BUSINESS ANALYSIS

1. Mysti Farris (see Problem 1-20) is considering raising the selling price of each cue to $50 instead
of $40. If this is done while the costs remain the same, what would the new break-even point
be? What would the total revenue be at this break-even point?

2. Mysti Farris (see Problem 1-20) believes that there is a high probability that 120 pool cues can
be sold if the selling price is appropriately set. What selling price would cause the break-even
point to be 120?

3. Golden Age Retirement Planners specializes in providing financial advice for people planning for
a comfortable retirement. The company offers seminars on the important topic of retirement
planning. For a typical seminar, the room rental at a hotel is $1,000, and the cost of advertising
and other incidentals is about $10,000 per seminar. The cost of the materials and special gifts
 for each attendee is $60 per person attending the seminar. The company charges $250 per
person to attend the seminar as this seems to be competitive with other companies in the same
business. How many people must attend each seminar for Golden Age to break even?

4. A couple of entrepreneurial business students at State University decided to put their education
into practice by developing a tutoring company for business students. While private tutoring
was offered, it was determined that group tutoring before tests in the large statistics classes
would be most beneficial. The students rented a room close to campus for $300 for 3 hours.
They developed handouts based on past tests, and these handouts (including color graphs) cost
$5 each. The tutor was paid $25 per hour, for a total of $75 for each tutoring session.
(a) If students are charged $20 to attend the session, how many students must enroll
for the company to break even?
(b) A somewhat smaller room is available for $200 for 3 hours. The company is
considering this possibility. How would this affect the break-even point?

A.
 B. FROM 4.29 OR 4 STUDENTS IT WILL BECOME 2.86 OR 3 STUDENTS

5. Zoe Garcia is the manager of a small office support business that supplies copying, binding, and
other services for local companies. Zoe must replace a worn-out copy machine that is used for
black and white copying. Two machines are being considered, and each of these has a monthly
lease cost plus a cost for each page that is copied. Machine 1 has a monthly lease cost of $600,
and there is a cost of $0.010 per page copied. Machine 2 has a monthly lease cost of $400, and
there is a cost of $0.015 per page copied. Customers are charged $0.05 per page for copies.
(a) What is the break-even point for each machine?
(b) If Zoe expects to make 10,000 copies per month, what would be the cost for each machine?
(c) If Zoe expects to make 30,000 copies per month, what would be the cost for each machine?
(d) At what volume (the number of copies) would the two machines have the same monthly
cost? What would the total revenue for this number of copies?

A.
B.
C.

D. COST WILL BE EQUAL AT 40,000 VOLUME

SET 2:

1. Steve Goodman, production foreman for the Florida Gold Fruit Company, estimates that the
average sale of oranges is 4,700 and the standard deviation is 500 oranges. Sales follow a
normal distribution.
(a) What is the probability that sales will be greater than 5,500 oranges? Answer is 5.5%
(b) What is the probability that sales will be greater than 4,500 oranges? Answer is 65.54%
(c) What is the probability that sales will be less than 4,900 oranges? Answer is 65.47%
(d) What is the probability that sales will be less than 4,300 oranges? Answer is 21.13%
2. The time to complete a construction project is normally distributed with a mean of 60 weeks
and a standard deviation of 4 weeks.
(a) What is the probability the project will be finished in 62 weeks or less? Answer is 69.15%
(b) What is the probability the project will be finished in 66 weeks or less? Answer is 93.32%
(c) What is the probability the project will take longer than 65 weeks? Answer is 89.43%
 3. Nite Time Inn has a toll-free telephone number so that customers can call at any time to make a
reservation. A typical call takes about 4 minutes to complete, and the time required follows an
exponential distribution. Find the probability that a call takes
(a) 3 minutes or less? Answer is .5276
(b) 4 minutes or less? Answer is .6321
(c) 5 minutes or less? Answer is .7135
(d) Longer than 5 minutes? Answer is .5276

a.

b.

c.
4. During normal business hours on the east coast, calls to the toll-free reservation number of the
Nite Time Inn arrive at a rate of 5 per minute. It has been determined that the number of calls
per minute can be described by the Poisson distribution. Find the probability that in the next
minute, the number of calls arriving will be
(a) exactly 5 = Answer is .1755
(b) exactly 4 = Answer is .1755
(c) exactly 3 = Answer is .1404
(d) exactly 6 = Answer is .1462
(e) less than 2