Essays on Introduction to Quantitative Management Assignment

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The paper  “ Introduction to Quantitative Management” is a germane example of a finance & accounting assignment. From the Exxon data, the first step is completing the calculation of the exact values of all the parameters by replacing the missing value of “ b = 113.” This is done as shown below: The profits realized per barrel of the blended 3 petrol grades   A B C D E Profit Standard 14% 25% 22% 14% 25% 66 +0.02*b = 66 + 0.02*113 =66 + 2.26 = 68.26 Super 20% 20% 20% 18% 22% 80 Hi-Grade 25% 15% 15% 25% 23% 90 The Supply contraction for the 3 petrol grades Grade Order (barrels) Standard 20,000 Super 6,000 Hi-Grade 12,000 + b*20 = 12,000 + 113*20 =12,000 + 2260 =14,260 With the data now complete, we proceed to the next step. The contract for the supply of (12,000 + b*30) barrels of Hi-grade to be signed is equivalent to: 12,000 + b*30 where b = 113. So, 12,000 + b*30 = 12,000 + 113*30                                                           = 12,000 + 3390                                                           = 15,390 barrels of Hi-Grade petrol Report to Texxon Management: In order for Exxon to meet the current demand for the already contracted petrol grades, then, the production has to be met fully by the shipped crude oil types.

However, for the company to maximize its returns, it should cider undertaking the most profitable production.

Below is a summary of the returns realized if the company produces only all units of any single petrol grade with the already ordered materials.   I unit of crude material produces x units of grade petrol Barrels of crude Standard Super Hi-Grade A: 12,000 1/0.14 = 7.14286 1/0.20 = 5 1/0.25 = 4 B: 15,000 1/0.20 = 5 1/0.20 = 5 1/0.15 = 6.66667 C: 15,000 1/0.25 =4 1/0.20 = 5 1/0.12 = 8.33333 D: 12,000 1/0.14 = 7.14286 1/0.18 = 5.55556 1/0.25 = 4 E: 15,000 1/. 25 = 4 1/0.22 = 4.54545 1/0.23 = 4.34783 So, from the table above, since the materials have to be used together, the maximum number of units each of the crude materials can produce is listed below.   No.

unit of blend grade petrol available material can produce Barrels of crude Standard Super Hi-Grade A: 12,000 7.14286*12,000 =85,714.32 5*12,000 = 60,000 4*12,000 = 48,000 B: 15,000 5*15,000 = 75,000 5*15,000 = 75,000 6.66667*15,000 =100,000.5 C: 15,000 4*15,000 = 60,000 5*15,000 = 75,000 8.33333*15,000 =124,999.5 D: 12,000 7.14286*12,000 = 85,714.32 5.55556*12,000 = 66,666.72 4*12,000 = 48,000 E: 15,000 4*14,000 = 60,000 4.54545*15,000 = 68,181.75 4.34783*15,000 = 65,217.45    

Reference

Lawrence J. A. & Pasternack B. A. (2002) Applied Management Science, 2nd edition
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