Exhibit 8.1 The Following Questions Pertain to the Problem and Spreadsheet Below

question 53

Multiple Choice

Exhibit 8.1
The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources, labor and material. The company wants to determine the selling price which will maximize profits. A unit of A costs 25 to make and demand is estimated to be 20 − .10 * Price of A. A unit of B costs 18 to make and demand is estimated to be 30 − .07 * Price of B. The utilization of labor and materials and the available quantity of resources is shown in the table. A reasonable price for the products is between 100 and 200. Let X₁ = demand for As and X₂ = demand for Bs.
Let P₁ = price for As and P₂ = price for Bs
-Refer to Exhibit 8.1. What formula is used in cell B7 of the spreadsheet for this problem?

• A) = 30 − .07 * C3
• B) = 20 − .1 * B3
• C) = B3 − B4
• D) = B5 * B7 + C5 * C7

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Definitions:

Cross-functional Teams

Groups composed of members from different functional areas of an organization, working towards a common goal.

Complex Activity

An activity involving multiple, often interrelated steps or processes that require a high level of skill, knowledge, or coordination to complete successfully.

Coordination

The organized arrangement or harmonious functioning of parts for effective results, often involving the integration of efforts among members of a group or organization.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.