Question: Problem A construction company is planning their projects for the year 2 0 2 5 . The company is considering the construction of a certain
Problem
A construction company is planning their projects for the year The company is considering the construction of a certain number of buildings. In the company has built similar buildings but with smaller areas, and the material costs associated with those buildings are as shown in the following table:
tableBuilding #Area Cost JD
The material cost index values are displayed in the following table:
tableYearCost index
The company started to build buildings in and the project management team observed that labor hours were needed to construct the first building; however, the number of labor hours per building decreased thereafter at a learning slope. Use the building as the basis for estimating the average labor hours per building and assume the average labor wage is JD per hour. The company's fixed cost is JD per year and the demand on the buildings is governed by the following relationship: where is the selling price per building.
a What is the range of profitable demand?
b How many buildings should the company construct in in order to maximize its profit?
c Based on the demand identified in part b what is the breakeven selling price per building?
d How much profit will the company make in using the demand identified in part b
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