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 2025. The company is considering the construction of a certain number of 1,000m2 buildings. In 2022, the company has built 5 similar buildings but with smaller areas, and the material costs associated with those 5 buildings are as shown in the following table:
\table[[Building #,Area (m2),Cost (JD)],[1,680,85,443],[2,727,90,011],[3,760,92,488],[4,790,95,082],[5,825,97,499]]
The material cost index values are displayed in the following table:
\table[[Year,Cost index],[2021,336],[2022,346],[2023,348],[2024,351],[2025,353]]
The company started to build 1,000m2 buildings in 2023, and the project management team observed that 21,690 labor hours were needed to construct the first 1,000m2 building; however, the number of labor hours per building decreased thereafter at a 93% learning slope. Use the 8th building as the basis for estimating the average labor hours per building and assume the 2025 average labor wage is JD 3.5 per hour. The company's fixed cost is JD 250,000 per year and the demand on the buildings (D) is governed by the following relationship: p=228,000-1,400D, where p is the selling price per building.
(a) What is the range of profitable demand?
(b) How many buildings should the company construct in 2025 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 2025 using the demand identified in part (b)?
Problem A construction company is planning their

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Civil Engineering Questions!