Using Solver in Excel for Analysis: Tallink Case Analysis

B. 1. The impact of costs on the decision to move forward with the new Maui Sandal line is as follows: As the production continues, the hours needed for each batch, or individual pair, will begin to decrease. By continuing to produce this line the total labor costs will continue to decrease, but most likely, at a slower rate as more sandals are produced. This data can help the company decide employment levels, capacity, costs, and their pricing of this particular merchandise in the open market. The company predicts that it will take 1,000 labor hours for production to complete for the first batch, with 50 total batches between month 1 and month 4.

Solely taking a look at the graph, to accommodate future demand for growth I would recommend ocean transportation to move our products from the new facility in China. As we expect demand to grow by 10 percent annually over the next five years, it will be most beneficial to utilize ocean transportation as projected total costs for air becomes higher than ocean above the trade off point of 1,904,761.9 POUNDS. For example, total projected costs were calculated to be at $587,156 for air versus $630,080 for ocean at the end of 5 years. Extrapolate the graph even further into the future, with the expectation of even more growth,

If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.

In our excel model we tried to determine the no: of units/TEU at which the cost of the Option 2 (Zaragoza) is lower than cost of option 1 (Rotterdam) by varying the number of units/TEU (J 13 cell in excel model) and finding the influx point at which the cost difference becomes positive (E 69 cell in excel model).

If the company is incorporated in the U.S., the NPV will be $-7,836,500.07(US25) after 25 years and will be $-6,395,945.22(US30) after 30 years. Therefore, the U.S. company should not purchase the vessel. If the company is established in Hong Kong, the NPV will be $1,522,472.92(25HK) after 25 years and will be $3,402,293.81(30HK) after 30 years. Therefore the 30 years should be the optimal number of years to operate the carrier before scrapping it after 30 years. In this situation, if the 15-year-selling policy is changed, the company should buy the carrier. For years 26-30, we assume that average daily charter rate is increased by $200 per year. The expected daily hire rate is calculated by multiplying Avg. Daily Charter Rate by adjustment factor for hire rate of 65%.

147 (1) Assume that BlueSky purchases three identical aircraft. How many coach seats should BlueSky order for the three new aircraft? (2) Now suppose that the three aircraft can be different sizes, between 240 and 380 coach seats. (a) How do you think the three aircraft should be allocated among the six routes? In other words, should the same aircraft always fly the same routes? Why or why not? (Hint: You do not need an optimization model to answer this question). (b) How many coach seats should BlueSky order for each of the three new aircraft? (3) Because it is cheaper to manufacture three identical planes, Airbus is offering BlueSky a one-time, $5 million discount if it will order three identical aircraft. Should BlueSky take the discount? In deciding this, you may assume that BlueSky operates 3 banks per weekday through Houston, and that the revenues and demands for every bank on every weekday are equal to the demands in Tables 1 and 2 of the (A) Case.

Considering that an average ticket price is $1500 and the cost per passenger is $200, each sold ticket generates $1,300 of the positive cash flow. Since $295,000 of the initial capital had been spent by November 14th, the following minimum number of passengers must sign up in order for Health Cruises to break even provided no more money is invested:

I have been asked to produce a report for management of Matteck plc in which I will evaluate the financial viability of the investment proposal. The company is considering expanding into Asia. This operation would involve the acquisition of a factory, a purchase of several new motor vehicles and a new distribution unit. The following are the estimated costs of the planned investment:

CubeSmart’s Q1 2017 results came in line with the company’s expectations. The company was pleased with their portfolio performance and the 50 basis point gain in physical occupancy. Revenue for the quarter was $133 million, an increase of $14.2 million, and property operating expenses were $44.9 million, an increase of $4.7 million from the company’s same period results in 2016. Funds from operations was $65.7 million for the first quarter compared with $58.2 million for the first quarter of 2016. Interest expense increased from $12.1 million during the first quarter of 2016 to $13.6 million during he first quarter of 2017. This is due to the higher amount of debt outstanding during the 2017 period to fund a portion of the company’s growth.

The following paper analyzes the Whitbread World Sailboat Race case scenario presented at the end of chapter 9 in the Gray and Larson text, Project Management: the Managerial Process. The project encompasses two main objectives; one, design, build and test a new vessel, and two, select and train a crew capable of winning the race. Both objectives must be completed within 45 weeks, the start of the race, and with a planned budget of $3.2 million.

1. In question 1, I have assumed its only the Tashtego that makes the trip of Balik to Singapore and back. I have also assumed the relevant cost is the cargo cost only. Therefore, profit contribution of carrying I ton of tapioca from Balik and Singapore:

1. Daily spot hire rates are determined according to supply and demand of the shipping capacity. According to the article, the supply of ships available equals the number of ships currently in the fleet plus any new ships added, minus any scrapings and sinking. According to Exhibit 2, there are a limited number of ships older than 24 years which are likely to be scraped. For those ships under the age group from 15 to 19, they will continue to provide supply and are not likely to be scrapped because a lot of them will get into the second hand market. The majority of the fleet is fairly young, and it looks as though an additional 63 vessels are on

(Refer to original data.) Fuel cost is a significant variable cost to any railway. If crude oil increases by $ 20 per barrel, it is estimated that variable cost per passenger will rise to $ 90. What will be the new break-even point in passengers and in number of passenger train cars? Then, proceed to compute number of passengers =?

Cost-Plus. The price under this route was determined to be $2,245 (see Appendix D). Atlantic would gain market share under this route as the price is low

Every firm would love to invest in shipping industry due to large profits involved. However this would seem easy but practically it is lot more difficult and virtually impossible to establish in container line business. The problem pertains to large capital investments in form of vessel and container procurements and risk of operating vessels. Even if we take the examples of biggest companies