Business Analytics

Hi, please help below business analytics class’s homework

  1. Transportation operation

Your company uses freight contractors to move truckload lots of product from production facilities to customer distribution centers. Production facilities are located in Las Vegas, NV, Columbus, OH, and Ciudad Juarez, Chihuahua.

The availability of production capacity at each facility is not yet known, but it may not always be possible to ship from the closest facility. You will build a spreadsheet that can be used to compute the cost of any proposed trucking plan.

The demand for next month is as follow:
















In the United States, the cost of contracted linehaul1 trucking is about $1.60 per mile including fuel surcharge. Delays associated with crossing the border from Ciudad Juarez to El Paso TX adds about $130 per truckload.

A. Build an Industrial-Quality Spreadsheet Model that you can use to “experiment” with different trucking plans. Be sure that your model is contained within columns A-G of the “TransOps” tab in the HW2Template.xlsx file.


  1. I strongly recommend that you take the time to build your model on paper prior to implementing it in Excel.
  2. Note that your spreadsheet model will be evaluated on the correctness
    1. f its calculations and also on how well it conforms to the spreadsheet design principles discussed in class.
  1. Use the model from (a) to calculate the total cost of meeting demand under the following trucking plans:
    1. All demand is supplied from Las Vegas.
    2. All demand is supplied from Columbus.
    3. All demand is supplied from Ciudad Juarez.
    4. Demand to the following cities are as follow:
      • Seattle: half from Ciudad Juarez and half from Las Vegas;
      • Denver: 40 from Las Vegas and the rest from Ciudad Juarez;
      • Chicago: 130 from Columbus, 60 from Ciudad Juarez and the rest from Las Vegas;
      • Dallas: 45 from Ciudad Juarez and the rest from Las Vegas.

2. Modeling a Pro Forma Income Statement

Following the modeling and spreadsheet design principles discussed in class, build an Industrial-Quality Spreadsheet Model for the EToys case on the next page. Your model must estimate after-tax profits for each of the next four years.

Be sure to clearly note your assumptions.

Valuing a New Product at EToys*, an up-and-coming creator of electronic toys, was in the midst of planning the introduction of a new product. The initial marketing plan was based on the expected profitability of the product over the next four years. However, several participants in the debate recognized that the results might be sensitive to the assumptions on which they were based, and requested an analysis that took uncertainty into account.

The initial estimates were that the company could sell 75,000 units the first year with an increase of 12% per year thereafter. The selling price would be $19.95 the first year with an annual increase of $2.00. Variable costs per unit were broken down into four categories as follows:

Raw Materials $4.50

Direct Labor $7.50

Packaging $1.25

Distribution $0.75

Inflation was expected to be 4% in each of the next two years, rising to 6% in the fourth year. Fixed costs for the product were $25,000 for the factory and $15,000 for other fixed costs, and these were expected to remain constant over the next four years. Finally, the effective tax rate was assumed to be 22%.

In subsequent discussions, the management team agreed that three assumptions made in the analysis were especially uncertain. These were the initial sales price, unit sales, and labor costs. Careful consideration of these uncertainties would be necessary before coming to a decision. But not today….

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