Anna operates a consignment shop where she sells clothes for women and children. The average number of consignments sold per month is 1,000. The average material cost and the selling price of each consignment are $8 and $20, respectively.
The monthly fixed costs to run this business are given below:
Rental cost: $750Utilities: $150Advertising: $35Insurance: $100Labor cost: $4,000
a. Build an influence diagram that illustrates how to calculate profit.b. Using mathematical notation, give a mathematical model for calculating profit.c. Implement your model from part (b) in Excel using the principles of good spreadsheet design.
What will be an ideal response?
b. Let R - Rental cost
U - Utilities
A - Advertising
I - Insurance
L - Labor cost
M - Material cost per consignment
C - Consignments sold per month
S - Selling price
Profit = (C × S) - ((M × C) + (R + U + A + I + L))
c.
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