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Mantis Models - An Excel design exercise

You are a product marketing manager for Mantis Models, a toy company dedicated to realistic insect models. 

You have been asked to make a recommendation about how the advertising budget should be spent in the coming year.  Last year’s marketing budget of $40,000 was spent equally in each of the four quarters.  However, you think that a different quarterly allocation or budget amount would be useful to consider.

Mantis Models toys sell for an average of $40 and cost an average of $25 to manufacture.  Sales are seasonal and seasonal adjustments to unit sales are:

Q1: 90%          Q2: 110%        Q3: 80%          Q4: 120%

In addition to manufacturing costs, there are other costs to consider. 

·       Mantis Models has a sales force that costs $34,000 for the year. The sales forces costs are allocated $4,000 in Q1 and Q2 and $4,500 in Q3 and Q4.

·       Overhead costs generally run about 15% of gross revenue.

Quarterly unit sales average 4,000 units when advertising is around $10,000 in the quarter.

Advertising increases sales but has a limit. A marketing consultant estimated the relationship between advertising and sales as follows:

Unit sales = 35 * Seasonal Factor * Sqrt (3,000 + advertising spend)

Assignment:  

Design an Excel spreadsheet to model this business problem.

DO NOT JUMP STEPS. Use the FlipGrid to post questions and answers to the problem.

1)     Create an influence diagram of the problem in power point.  Use the influence diagram to understand:

What are the input items?

What is/are the decision variables?

What is the Output?

What are the calculations?

2)     Sketch the excel spreadsheet you would develop. I have supplied you a pdf file to use.

3)     Develop the excel spreadsheet based upon your sketch.

Turn in to the drop box all three files.

1) The ppt influence diagram. 

2) a scanned copy of your sketch

3) A working excel file of the problem properly formatted.