CGS 2518 – Project 6 Instructions-Spring 2014
Open the preformatted PerfectPrinter.xlsx workbook that was provided for this project. Follow these instructions to
complete the project. Refer to the screen images shown at the end of the instructions to verify your results.
Important: You must complete Tutorial 10 before attempting this project. Perfect Printers is a manufacturer of
computer printers. They are introducing a new model called the P250 model. They wish to determine the sales price that
will maximize the company's revenue. If the price is too high, the sales will not be strong. If too low, although they will
sell more units, they would have to acquire more of the parts required to build this model. They wish to use price
elasticity to determine the optimal price point using only the current parts inventory that they have, as well as the
optimal price point if they were to acquire more parts. You will use the Solver feature in Excel to complete this analysis.
Important: The image shown below is the final result after two runs of Solver. Your intermediate results in earlier steps
will NOT match all of the values shown in the image. Your final result should match, however.
Turn on the Solver feature:
1. Follow the instructions in the dark red box near the bottom of page EX 593 to activate the Solver feature. (Note:
if you did not see Solver in the tool bar, and still do not see Solver in the toolbar after following those steps,
restart Excel.)
Documentation Worksheet:
1. Enter you name as author, today's date, and a brief purpose statement.
Price Point Analysis Worksheet:
1. General: Tahoma font should be used throughout the Price Point Analysis worksheet.
2. The company estimates that it can sell 1,500 of the new printer at a price of $125 each. Enter these values in C5
and C6.
3. Enter a formula to calculate the revenue this would produce in C7. Format C5:C7 appropriately as shown in the
image below.
4. Enter the Price Elasticity value of 1.5 in C10, which indicates that for every 10% increase in the price, sales will
decline by 15 percent. Enter the sales price of $125 in C12.
5. Enter a formula to calculate the estimated units sold assuming elasticity in C11, using the INT function to ensure
that the units sold value will be an integer. (Hint: use the elasticity formula from Tutorial 10.)
6. Enter a formula in C13 to calculate the revenue that would result from the price and quantity under price
elasticity.
7. Insert formulas in B35 and C35 that reference the values of C12 and C13 respectively.
8. In the range B36:C56, create a one-variable data table for price values ranging from $75 to $175 in increments
of $5. Format this table and its headings as shown in the image below.
9. Use the range B36:C56 to create a chart of style scatterplot with smooth lines to show how changing the sales
price affects revenue.
a. Change the data series name to Price Elasticity Curve.
b. Move the chart legend to the bottom of the chart.
c. Set the range of the horizontal axis from $0 up to $200.
d. Set the range of the vertical axis from $-25,000 up to $200,000 in increments of $25,000. Edit the axis
number format to display the axis values in the custom format $#”K". Do not show the display units on
the chart. Use the Axes button to set the Primary Vertical Axis to Show Axis in Thousands.
e. Add Price as the horizontal axis title, and Revenue as the vertical axis title (rotated). Format these with
font size of 10.
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f. Change the chart title to Price Point Analysis.
g. Resize and reposition the chart to cover the range E33:I54.
Add a new data series to the chart consisting of the range C6:C7 as a single point. Name this series Current Price
Point.
a. Do not display a line for this point. (Hint: To find this point on the chart, use the dropdown list in the
Current Selection group of the Chart Tools – Layout tab to select the Series "Current Price Point", then
use the Format Selection button below it .)
b. Use the built-in circle marker style, and set the size to 7.
c. Change the marker color of this data point to Gold Accent 4 (in the top color line of the Theme Colors).
d. Change the marker line color to Brown Text 2 (in the top color line of the Theme Colors).
You will now use Solver to determine if the company's revenue will increase if the price of the telescope
decreases. Use Solver to find the maximum revenue in cell C13 by changing the value of C12. Constrain C12 to
be an integer value, and constrain C12 to be greater than or equal to $75 (you should have two constraints).
Keep the Solver solution.
Now you will capture the optimal price point values before doing more analysis. Copy the values only (not the
formulas) from the range C12:C13 into the range F5:F6, and format them as shown. (Your values in F5:F6 should
now match the same cells in the image provided below.)
Save the current Solver parameters (using Solver’s Load/Save button) into the range E9:E14, and format as
shown.
Add a new data series to the chart named Optimal Price Point using the values in the range F5:F6.
a. Do not display a line for this point.
b. Use the built-in circle marker style, and set the size to 7.
c. Change the marker color of this data point to Ice Blue 1 (in the top color line of the Theme Colors).
d. Change the marker line color to Black Text 1 (in the top color line of the Theme Colors).
The Solver result you just achieved assumes an unlimited amount of parts in stock. Now you will analyze the
optimal price point given the company’s current stock of parts. In the range E18:E30, enter formulas to calculate
the number of parts required to meet the current units to be built (shown in C11). Format as shown.
In the range F18:F30, enter formulas to calculate how many of each part will be left after the desired number of
units are built. Set the number format for the range F18:F30 to show no decimal places, and negative values in
red in parentheses.
Change the price value in D12 back to $125. Edit the Solver model to add a constraint that you cannot produce
more printers than would be allowed by the current amount of parts in stock. Ensure that the Make
Unconstrained Variables Non-Negative checkbox is checked. Run the Solver model again. Keep the new Solver
results. You should now have the same values for C11:C13 as shown in the image below.
Now you will capture the optimal price point with inventory values. Copy the values only (not the formulas) from
the range C12:C13 into the range I5:I6 and format as shown.
Add a new data series to the chart named Optimal Price Point with Inventory using the values in the range I5:I6.
a. Do not display a line for this point.
b. Use the built-in circle marker style, and set the size to 7.
c. Change the marker color of this data point to Tan Background 2 (in the top color line of the Theme
Colors).
d. Change the marker line color to Black Text 1 (in the top color line of the Theme Colors).
Save the current Solver parameters into the range H9:H15, and format as shown.
Set the page orientation to Landscape, and scale it to fit on a single page.
Add a right footer containing your name, the date, and the name of the workbook on separate lines.
Save your file, close Excel, and submit your completed Excel workbook.
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Price Point Analysis Worksheet (after 2nd run of Solver):
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