1. What is Molly’s current monthly volume?

Molly’s fixed costs = $1,700 per month

Variable costs are $0.25 per item
Cost per item is $1.10Hence,
the current monthly volume = $1,700 ÷ (1.1 – $0.25) = 2000
Molly’s current monthly volume is 2,000 items.

2. If Molly purchases the new equipment, how many additional items will she have to dry-
clean each month to break even?

Assume: new machine

3. Molly estimates that with the new equipment she can increase her volume to 4,300 items per
month. What monthly profit would she realize with that level of business during the next 3
years? After 3 years?

Profit z: vp-cf-vcv=43000*1.10-2150-4300*0.25=1505/month
After three years:
Profit =4300*1.10-1700-4300*0.25=1955/month
new break even point , lower price=0.99$
1700/(0.99-0.25)=2297.3
Price lower , volume increase to 3800
Z= vp-cf-vcv= 1112/month
4. . Molly estimates that if she purchases the new equipment and lowers her price to $0.99 per
item, her volume will increase to about 4,700 units per month. Based on the local market, that is
the largest volume she can realistically expect. What should Molly do?

4700*.99-2150-4700*0.25=1328

Buy machine Lower price buy machine and

lower price
v 4300 3800 4700
z 1505 1112 1328
When Tracy McCoy wakes up on Saturday morning, she remembers that she promised the PTA
she would make some cakes and/or homemade bread for its bake sale that afternoon. However,
she does not have time to go to the store and get ingredients, and she has only a short time to
bake things in her oven. Because cakes and breads require different baking temperatures, she
cannot bake them simultaneously, and she has only 3 hours available to bake. A cake requires 3
cups of flour, and a loaf of bread requires 8 cups; Tracy has 20 cups of flour. A cake requires 45
minutes to bake, and a loaf of bread requires 30 minutes. The PTA will sell a cake for $10 and a
loaf of bread for $6. Tracy wants to decide how many cakes and loaves of bread she should
make. Identify all the possible solutions to this problem (i.e., combinations of cakes and loaves
of bread Tracy has the time and flour to bake) and select the best one.

Time= 3 hours = 180 min

Flours= 20cups

cake bread
flour 3 8
time 45 30
Selling price 10 6

cake bread Total sales Violate constraint

0 2 12 no
1 2 22 no
3 1 36 no
4 0 40 no

Conclusion : we choose the one that have maximize the profit

A furniture manufacturer in Roanoke, Virginia, must deliver a tractor trailer load of furniture to a
retail store in Washington, DC. There are a number of different routes the truck can take from
Roanoke to DC, as shown in the following road network, with the distance for each segment
shown in miles. Determine the shortest route the truck can take from Roanoke to Washington,
DC.

1-3-5-9 =211 miles

The Easy Drive Car Rental Agency needs 500 new cars in its Nashville operation and 300 new
cars in Jacksonville, and it currently has 400 new cars in both Atlanta and Birmingham. It costs
$30 to move a car from Atlanta to Nashville, $70 to move a car from Atlanta to Jacksonville, $40
to move a car from Birmingham to Nashville, and $60 to move a car from Birmingham to
Jacksonville. The agency wants to determine how many cars should be transported from the
agencies in Atlanta and Birmingham to the agencies in Nashville and Jacksonville in order to
meet demand while minimizing the transport costs. Develop a mathematical model for this
problem and us
e logic to determine a solution.