# solution

Refer to the Par
Insights, Inc. example in your textbook. A competitor firm DLS Apps, Inc.
decides to enter the market for apps made for teenagers and children. Their
Production Supervisor analyzed each of the operations and concluded that if the
company produces apps for children, cach app would require 7 hours in the theme
creation department, 11 hours in the graphics and imaging department, 4 hours
in the educational content department, 7 hours in the coding department, and 4
hours in the testing and launching department. On the other hand, each app for
teenagers would require 6 hours in the theme creation department, 14 hours in
the graphics and imaging department, 12 hours in the educational content
department, 10 hours in the coding department, and 1 hour in the testing and
launching department. After studying the departmental workload projections, the
Production Supervisor estimates that 100 hours for theme creation, 250 hours
for graphics and imaging, 200 hours for the educational content creation, 150
hours of coding and 50 hours for the testing and launching are available for
the production of the new apps during the next four months.

The accounting
department analyzed the costs based on the production data and overheads and
arrived at prices for the apps that will result in a profit contribution of
\$12,000 per children’s app and \$16,000 per teenager app produced. The CEO
asserts that to be successful in the long run, at least 4 children’s apps must
be launched in the next four months. The management is trying to identify how
many apps of each type should they launch in the next four months and have
hired you to help them figure out what the optimal solution would be and what
the expected profits would be.

Obtain the optimal solution, either
graphically or by using Excel Solver (You’ll be uploading this file in a later
question). Fill in the following blanks based on your solution:

a. The total expected
profit is \$

b. They should make
Children’s apps and Teenager’s Apps.

c. The department has
the highest slack of hours

d. If the company was
able to obtain 5 more hours in the Theme department, the profit would increase
by \$ (round it up to the nearest whole number).