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QBA Exra Credit Explanation

QBA Exra Credit Explanation - and the Tank Top price Vary...

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QBA Extra Credit Quiz James Buffett sells two popular styles of shirts on the mall, a regular T-Shirt and a Tank Top. Each has a hand drawn image of the Capital building. The cost of the regular shirt is \$8 and the cost of the Tank Top is \$6. James has determined the following Price-Quantity models Number of Regular T-Shirts = 400 – 15 x Regular shirt price, and Number of Tank Tops = 500 – 12 x Tank Top price. James is planning next weekend’s trip and he would like to know what price he should charge in order to Maximize profit. Use the Excel spreadsheet to answer the following questions. a. Create a Two-Way Data Table that will show the profit versus the Regular T-Shirt price
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Unformatted text preview: and the Tank Top price. Vary the prices from \$15 to \$25 in increments of \$1. Use your table to determine what prices will maximize profit. What are the prices and profit? The price that will maximize profit is \$5,121. This means selling 17 tanks and 24 regular tanks. b. Use Solver to determine the optimal solution, does this agree with part a? After using the solver the solution they gave was \$5,123 selling 17.3 tanks and 23.8 regular tops. In comparison they are close but not exact but I agree with part a being that it’s in the same area as the solver. Not far from the solution but plausible....
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