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Tutorial Exercise Topic 1 Modelling

This document contains 5 questions regarding business modeling exercises. Question 1 involves developing cost and profit models for an education seminar with varying attendee numbers. Question 2 involves calculating the breakeven point and determining profitability for publishing a textbook. Question 3 involves forecasting demand using a linear regression model. Question 4 models the relationship between bass drum sales and a band's TV appearances. Question 5 develops a linear regression model to predict photocopy paper usage based on the number of processed loans.

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Gene Y
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289 views2 pages

Tutorial Exercise Topic 1 Modelling

This document contains 5 questions regarding business modeling exercises. Question 1 involves developing cost and profit models for an education seminar with varying attendee numbers. Question 2 involves calculating the breakeven point and determining profitability for publishing a textbook. Question 3 involves forecasting demand using a linear regression model. Question 4 models the relationship between bass drum sales and a band's TV appearances. Question 5 develops a linear regression model to predict photocopy paper usage based on the number of processed loans.

Uploaded by

Gene Y
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BB 203 Tutorial Exercise: Business Modelling (T1)

Question 1

Top Learn offers education seminars on financial trading. For a seminar on derivatives for the month
of June 2011, the details are as follows

The fee per attendee is RM 300

The costs for conference room, seminar speaker fee and marketing are RM 4800.

The costs of laptops rented for the seminar is RM80 per attendee

Let x represents the number of attendees

1. Develop a model for the total cost to put on the seminar.


2. Develop a model for total profit if X students enrol in the seminar.
3. They have forecasted 30 attendees for the seminar. What would be the profit earned if the
forecast is accurate?
4. What is the breakeven point?
5. Construct the problem using the Excel model.

Question 2

Utamabooks plans to publish an updated version of their popular Statistics textbook. The fixed cost
of manuscript preparation, textbook design and production setup is estimated to be RM 80,000.
Variable production and material costs are estimated to be RM3 per book. The marketing
department estimates that they are able to sell 4000 copies of the textbook before it needs to be
updated again. The company plans to sell the books to their booksellers for RM20 each.

1. What is the breakeven point?


2. With 4000 copies, will it be profitable?
3. With the estimated demand of 4000 copies, what is the minimum price per copy that the
publisher must charge to break even?
4. If the selling price is increased to RM25.95, and the estimated demand remains the same,
would you recommend that the publishing take place?
5. Construct the problem using the Excel model.

Question 3

John Smith has developed the following forecasting model

Y = 36 + 4.3X

Where

Y = demand for K10 air conditioners

X = outside temperature (Fahrenheit)

1. Forecast demand for K10 when temperature is 70 F.


2. What is the demand for a temperature of 80 F?
3. What is the demand for a temperature of 90 F?
BB 203 Tutorial Exercise: Business Modelling (T1)

Question 4

The operations manager of a musical instrument distributor feels the demand for base drums may
be related to the number of television appearances of the popular rock group, Green Day during the
preceding month. The manager has collected the data shown in the table below

Demand for base drums Green Day TV Appearances


3 3
6 4
7 7
5 6
10 8
8 5

1. What is the relationship between the demand for base drums and Green Day television
appearance?
2. What is your estimated target for bass drum sales if Green Day appeared on television six
times in the previous month?

Question 5

Syireen, in charge of office supplies at Srijaya Holdings., would like to predict the quantity of paper
used in the office photocopying machines per month. She believes that the number of loans
originated in a month influence the volume of photocopying performed. She has compiled the
following recent monthly data:

Number of Loans Sheets of Photocopy Paper Used (000's)


25 16
25 13
35 18
40 25
40 21
45 22
50 24
60 25

1. Develop the simple linear regression formula for the situation above
2. Estimate the number of photocopy paper used if 65 loans are processed.

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