This assessment item continues on from Part 1 of the STPL Case Study

Mixing

Spreading

Cooking

Packaging

HOURS REQUIRED

1.5 kg

4

8

30

3

800 gram

10

3

20

2

300 gram

8

8

20

2

HOURS AVAILABLE

8,000

12,000

100,000

10,000

Required:

1. 
   Formulate a linear program to determine the expected mix of maca-sponge, ensuring that the maximum profit is obtained. (8 marks)
   


2. 
   State the optimal mix and resulting profit. Discuss your results (7 marks)
   

Question 2 (15 marks)

To assist Marty with his marketing proposal you have offered to provide him with a break-even analysis for the 3 maca-sponge sized cakes. The costs are the same (refer to the cost estimation table in question 1). Fixed costs are $525,000 and the sales mix in the same percentage allocation that you calculated in question 1.

1. 
   Calculate the unit contribution for each product. (2 marks)
   


2. 
   What is the sales mix? (2 marks)
   


3. 
   Calculate the weighted average unit contribution margin? (3 marks)
   


4. 
   What is the break-even sales revenue in dollars? (4 marks)
   


5. 
   How many of each type of maca-sponges must be sold to earn a target profit of $350,000? Assume a constant sales mix. (4 marks)
   

Question 3 (10 marks)

Marty wants to propose that STPL makes icing sugar figurines to go on top of the maca-sponges. The machine is available, however, it is not always reliable and will often make defective figurines. The figurines would be 1,2,3,4, and 5 inches tall. Based on one day’s production there were a total of 130 of the 1 inch figurine, 256 of the 2 inch, 25 of the 3 inch, 396 of the 4 inch and 278 of the 5 inch.

Required

1. 
   What is the probability of selecting a 1 inch figurine from the defective bin? (2 marks)
   


2. 
   What is the probability of selecting a figurine that is 3 inches or more from the defective bin? (2 marks)
   


3. 
   How can probability information be used to assist management in making better decisions? (6 marks)
   

Question 4 (10 marks)

The Board of Management tends to focus decisions based on events occurring in the next month, only ever considering a longer-term question when they set budgets, which typically have focused on the previous year’s events. You would like to encourage the Board of Management to adopt a stronger strategic focus rather than be operational in their approach to decision making. Explain the difference between operational and strategic decisions. Ensure you provide examples and current thinking about the role each type of decision-making plays within an organisation. (10 marks)

Preparation and submission requirements

This assignment requires a Microsoft Word document as well as a Microsoft Excel spreadsheet solution. Both of these must be submitted online using Turnitin.

You must submit both a Word file AND an Excel file

. Failure to submit both of the files by the due date constitutes non-submission and late penalties will apply.

Your spreadsheet solutions must be cut and pasted into the Word document.


This Word document is what will be marked and returned to you. Remember that in the business world, the professional presentation of information is fundamental and accordingly, marks will be deducted for poor presentation. An electronic version of your source spreadsheet is required to enable markers to open the file and test your efficient use of spreadsheet formula by, for example, changing the values of input variables. Marks will be awarded on the basis of correctness of answers, appropriate use of spreadsheet modelling, effective worksheet design, and level of professional presentation.

Your business report should include:

1. 
   a cover page addressed to your required audience;
   


2. 
   an executive summary (refer to the note below regarding an executive summary);
   


3. 
   a table of contents (linked to the headings in the report);
   


4. 
   headings and subheadings clearly identifying what is being discussed;
   


5. 
   brief explanation and purpose on what each question is addressing
   


6. 
   a conclusion; and
   


7. 
   referencing (using APA style).
   

A reference list is mandatory for this assessment item.


It is important that you are aware of how to reference properly and a reference list must be provided, properly formatted using APA guidelines with a hanging indent.
Please note that it is a submission requirement that you include a reference list and assignments which do not include a properly formatted reference list will incur up to a 5 mark penalty.

Review the rules regarding plagiarism. If you are not sure, contact your lecturer or Academic Skills advisor for advice. There is no excuse for presenting the work of others as your own; this includes cutting and pasting material from the web without properly referencing the source.