BLW2 - Management
***See attached documents***Lab 2: Modeling and Analysis
Lab Overview
Scenario/Summary
Adventure Works Cycles is planning the companys production for the coming year. In their product subcategory of Touring Bikes, the company manufactures three different models: the Touring-1000, Touring-2000, and Touring-3000. All three are produced at the same factory by the same group of workers, and the companys overall business plan limits the budget and labor hours available for the Touring Bikes subcategory as a whole. So, making more of one model in the subcategory means making fewer of the others. The production manager for Touring Bikes has asked you to determine what production mix will generate the most gross profit for the company while satisfying all given constraints.
The cost accounting department has provided the following parameters to be used for production planning.
Model
Touring-1000
Touring-2000
Touring-3000
Gross profit per unit
$900
$460
$280
Labor hours per unit
18.5
9.5
11.5
Material cost per unit
$560
$189
$115
The Adventure Works business plan for the coming year allocates a maximum of 2,000 labor hours and $40,000 in material costs for production of all Touring Bike models combined. Contractual commitments with distributors require that the company produce at least 50 Touring-1000 models, 10 Touring-2000 models, and 10 Touring-3000 models.
In addition to these three standard models, Adventure Works plans to introduce a new experimental model for bicycle motocross competition, the BMX-9000. As a new product, this is not subject to the same constraints as the Touring Bike models. However, demand for this new product is uncertain. The marketing departments best projection for full-price sales is 100 units, with a standard deviation of 30 units, following a normal distribution. Units sold at full price have a gross profit per unit of $500. Any units produced that do not sell at full price will be sold at a loss of -$100 per unit. The production manager has asked you to recommend how many units of the BMX-9000 should be produced based on a simulation.
The tasks for this lab are listed below.
· Create a spreadsheet with formulas and constraints for the Touring Bike model mix.
· Use Solver to find the optimal solution to the problem.
· Perform a sensitivity analysis of the solution.
· Create a Monte Carlo simulation for the BMX-9000.
· Interpret the results and make recommendations to management.
After you are done, submit your completed lab work.
Deliverables
You will submit two files for this lab.
· An Excel workbook titled Lab2_yourlastname.xlsx containing the following worksheets: (1) Touring Bike Model Mix, (2) Answer Report, (3) Sensitivity Report, (4) Limits Report, (5) GP Sensitivity Analysis, (6) and BMX-9000 Simulation
· A Word document titled Lab2_yourlastname_Paper.docx containing a one-page summary of your findings and recommendations for Adventure Works
When submitting the workbo
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