Sample 1 DSIMGTS Paper
Sample 1 DSIMGTS Paper
I. COMPANY OVERVIEW
A. Background of the Company
a. Logo
b. Location
c. Pricing Profile
d. Target Market Profile
e. Competitors and Other Branches
f. Products
g. Distribution Channel
B. Mission and Vision
VI. APPENDIXES
VII. REFERENCES
I. COMPANY OVERVIEW
c. Pricing Profile
The overall nature of Totemate is selling essential items to every
individual; thus, the prices of each item vary, depending on the affordability of a
person. The cheapest item ToteMate has to offer would be the ToteMate Oxford
pouch with an arm strap which costs P16 and the most expensive item is a TV
monitor which costs P13,000. Setting aside computer parts because they usually
cost an arm and a leg, the overall mean of the pricing for the premium bags,
premium envelopes, pouches, and storage organizes does not exceed P1,000.
f. Products
Started supplying Office and School Materials to different Merchandising
Establishments under the brand of ToteMate. It is planning to expand its products
to plastic containers inspired by Muji. It offers various products: premium bags,
ziplock pouches, organizers, knife bags, envelopes, and computer bags. Among
these varieties of products, the top 5 marketable and popular products are
ToteMate plain tote mesh, ToteMate white mesh EVA pouch organizer, ToteMate
Muji high quality inspired EVA clear pouch and case, ToteMate Muji inspired
stackable organizer blocks, and ToteMate horizontal document and office bag
with handle.
The ToteMate plain mesh tote pouch (see Figure 2) is a nylon plain
mesh pouch used for school, travel, and home purposes. It has a zipper
closure and its plain mesh material makes it see-through. The product size
used for the model will be the B4 size with dimensions of 9.8 x 13.9
inches. (Fudamaxmktg, 2022d)
ii. ToteMate white mesh EVA pouch organizer
The ToteMate plain mesh EVA tote pouch organizer (see Figure 3)
is an EVA (ethylene vinyl acetate) white mesh pouch that is waterproof.
The material EVA is a flexible material It has a zipper closure and its white
mesh Antietam makes the product see-through. The product size used for
the model will be the B4 size with dimensions of 9.8 x 13.9 inches.
(Fudamaxmktg, 2022d)
Figure 4: Rectangle ToteMate Muji high quality inspired EVA clear pouch
The ToteMate Muji high-quality inspired EVA clear pouch (see
Figure 4) is an EVA (ethylene vinyl acetate) white rectangular prism mesh
pouch that is waterproof and dustproof. The material EVA is a flexible
material and the product’s design is influenced by the Muji pencil case
product line. It has a zipper closure and its white mesh material makes the
product see-through. The product variation that will be used for the model
is the rectangular version. (Fudamaxmktg, 2022b)
The ToteMate horizontal document and office bag with handle (see
Figure 6) are made out of the canvas. Not just any canvas, but instead made
with high-quality oxford material. The product’s dimensions have two
classifications. First is the medium size with a dimension of 14x12x3 and
the large one with a 16x14x3 dimension respectively. The researchers will
focus on the large dimension variation. (Fudamaxmktg, 2022a)
g. Distribution Channels
Mission: To help customers build confidence to have whatever it takes to the next
level.
Vision: To be a part of the journey of every customer
II. STATEMENT OF THE PROBLEM
A. Problem
a. Objectives
The Objective of this final paper is to answer the following questions:
i. What are the costs and profit attributed to each product of Totemate’s
Product Expansion line?
ii. What is the optimal unit product mix to maximize profit?
iii. What is the highest attainable total profit given the current capital budget?
The researchers will also only focus on the objective of maximizing profit
by providing an optimal product mix given certain capital budget constraints.
Minimizing cost, Finding the best freight allocation and other costs-related
models will not be discussed in this paper as they are of different models with
different processes and procedures.
B. Data Gathering
To obtain the necessary data in order to formulate the resource-allocation model,
the researchers have communicated with a Fudamax Trading representative in order to
assess their needs and problems that models from Prescriptive Analysis, Linear
Programming, and Data Analytics can solve using the researchers’ knowledge on the
subject. The Business has given their concern about the recent sales of their new Product
line. These products include ToteMate plain tote mesh, ToteMate white mesh EVA pouch
organizer, ToteMate Muji high quality inspired EVA clear pouch and case, and ToteMate
Muji inspired stackable organizer blocks, and ToteMate horizontal document and office
bag with handle.
Formulas were then inputted into the Capital Spent Cells (See Figure 8), which
are =SUMPRODUCT(CogsSupplier,UnitProductProduced) for Cell H8,
=SUMPRODUCT(COGSManufacturer,UnitProductProduced) for Cell H9, and
=SUM(CapitalSpent) for Cell H10. The sum of capital spent indicates the total cost that
was expensed from the given Caputal Budget. For the objective cell or the total profit
(See Figure 9), the formula will be =SUMPRODUCT(UnitProfit,UnitProductProduced).
For added perspective, the researchers also employed A Net Profit Computation which
has the formula =TotalProfit-TotalSpent to calculate the net profit by subtracting the
expenses attributed to each product produced.
To test the given data, the study made use of an Excel solver (See Figure 10). For
the objective cell, cell I14 was indicated, and for the changing cells, cell range C14:G14.
For the constraints, CapitalSpent <= Capital Budget. The Integer Constraint was also
employed, UnitProductProduced = integer, to make sure the changing cells or the units
produced are not in decimal form pertaining to only a part of the product. The solving
method utilized is the Simplex LP method and the ‘make unconstrained variables
non-negative’ option was chosen.
b. Analysis of Results
From the solver analysis, the optimal product mix resulted to be 208 units of
Product 3 with 0 units for the others. With this, the total profit was revealed to be
₱29,120.00. This means that the model advises Fudamax Training to discontinue its
other products and only sell an amount of 208 units of product 3 in its next supply
period given a capital budget of ₱ 30,000 where ₱ 10,000 is allocated to Supplier
Cost of Goods Sold and ₱ 20,000 is allocated to Manufacturer Cost of Goods sold.
Advantages Disadvantages
● Total Budget is indicated and Total ● Does not account for Freight-Out
Capital Spent meets the budget Expense
● Gross (total) profit is distinguished ● Budget may need to be changed
from net profit due to a lack of accounting for the
expense of freight charges.
This spreadsheet model separates total profit from net profit, which is calculated by
subtracting capital spent from the capital budget. The key is that the capital spent is
within the budgeted range. It should also be mentioned that the model includes the sum of
the costs and the budget. Meanwhile, the drawbacks include the fact that the freight-out
expenditure is not addressed in this scenario, resulting in a situation in which some
charges such as this are not considered. Because of the removal of this component, it is
possible that the capital budget may need to be manipulated owing to the absence of
relevant expenditures such as freight charges.
Figure 13 shows the formulas that were then inputted into the Capital Spent
(H8:H10) cells, which are the sumproduct per row of the COGS,
=SUMPRODUCT(COGSFromSupplier,ProductProduced) for the suppliers and
=SUMPRODUCT(COGSFromManufacturer,ProductProduced) for the manufacturer.
Additionally, freight out is also included, and its formula is
=SUMPRODUCT(FreightOut,ProductProduced). For the objective cell or the total profit
(see Figure 14: Total Profit and Net Profit Formula of Alternative 2), the formula will be
=SUMPRODUCT(ProductProduced,ProfitPerUnit). Furthermore, the researchers also
included a net profit computation, which has the formula =Total_Profit-Total_Spent, to
calculate the net profit by subtracting the expenses attributed to each product produced.
The study used an Excel Solver to test the given data. As shown in Figure 15, the
Total_Profit (I14) was designated as the objective cell, and selected “Max”. On the other
hand, because ToteMate cannot generate a percentage of the product, the spreadsheet
model's changing cells, ProductProduced (C14:G14), must have integer values. As a
result, rules specifying that the changing cells must be integers were added for the
constraints. To do so, in Excel's Solver, click the "Add" button in the dialog box to
choose the range of these cells C14:G14 on the left, and then select "int" from the pop-up
option on the right. Another constraint, Capital_Spent <= Capital_Budget, were added.
Furthermore, one of the assumptions of linear programming is that the changing cells can
have any value that meets the functional and nonnegativity constraints, even fractional
values. Given the circumstances of ToteMate, they cannot create partial products; hence,
there is a need to use the integer. Subsequently, the Simplex LP approach was used, and
the option to "make unconstrained variables non-negative" was selected.
b. Analysis of Results
From Excel's Solver analysis, the optimal solution is to produce 260 units of
product 3: Totemate Muji-inspired stackable organizer blocks, and 0 units for the
other products. The product produced must have an integer value since the finished
products should be in whole and not in partial or fraction. Also, ToteMate’s total
capital budget remains the same at ₱ 30,000. However, the capital budget allocated
from the Cost of Goods Sold from both supplier and manufacturer has been lowered
from ₱ 15,000 to ₱ 12,500. This is to give funds to the freight out the expense of ₱
5,000. As a result, the Cost of Goods Sold from the Supplier needs to spend a capital
of ₱ 12,480 which satisfies the capital budget of not exceeding ₱ 12,500. On the other
hand, the Cost of Goods Sold by a Manufacturer needs to spend a capital of ₱ 9,360
which satisfies the capital budget of not exceeding ₱ 12,500. Meanwhile, ToteMate
needs to spend its capital of ₱ 468 on its freight out expenses. The costs needed to
spend by ToteMate amount to ₱ 22,308 in total. Furthermore, the Solver’s analysis
reveals that the total maximum profit that ToteMate can earn in producing 260 units
of product 3 is ₱ 36,400. Subsequently, ToteMate must deduct its costs to get the
amount of net profit, by deducting the total capital spent from the total profit. By
doing this, ToteMate will have a net profit of ₱ 14,092.
A. Advantages and Disadvantages of Model of Alternative 2
Advantages Disadvantages
The advantages of having the second alternative’s spreadsheet model include, first and
foremost, the accuracy of the data presented relative to the inclusion of the business's
freight-out expense, which is in this case included in computing for the total capital spent,
which should be within the budget. With the former characteristic being a different entity
as compared to the previous model, the provided spreadsheet also distinguishes total
profit from net profit, which is generated by deducting capital spent from the capital
budget.
The optimal solutions of the spreadsheet models for Tote Mate can be represented by the
following algebraic formulation:
Non-negativity constraints: A ≥ 0, B ≥ 0, C ≥ 0, D ≥ 0, E ≥ 0
Integer constraint: A, B, C, D, E = int
Based on the optimal solution provided by Solver Excel, The optimal number of products
manufactured to maximize the total profit of Fudamax trading while adhering the to the
Cpaital Budget constraint is to produce 208 units of Product 3. This optimal solution implies
that the best course of action for Fudamax Trading is to only produce product 3 as its main
expansion product and discontinue the other products.
B. Algebraic for Formulation for Alternative 2:
Let A = Product 1 (B4 ToteMate plain mesh tote Pouch)
B = Product 2 (B4 ToteMate white mesh EVA pouch organizer)
C = Product 3 (Rectangle ToteMate Muji high quality inspired EVA clear pouch)
D = Product 4 (ToteMate Muji inspired stackable organizer blocks)
E = Product 5 (ToteMate horizontal document and office bag with a handle)
Non-negativity constraints: A ≥ 0, B ≥ 0, C ≥ 0, D ≥ 0, E ≥ 0
Integer constraint: A, B, C, D, E = int
Based on the optimal solution provided by Solver Excel, The optimal number of products
manufactured to maximize the total profit of Fudamax trading while adhering to the Capital
Budget constraint is to produce 260 units of Product 3. In the alternative data set of adding the
freight cost to better represent the Cost of Goods Sold for each unit product, the optimal solution
does not deviate from the
V. CONCLUSION AND RECOMMENDATION
The objective of this paper is to outline the costs and profit attributed to each product,
find the optimal product mix for maximization of profit and identify the highest attainable total
profit given certain capital budget constraints. The paper and the excel model managed to
accomplish these objectives by using a resource-allocation model in order to find the optimal
product mix to produce given budget constraints. In both alternative datasets, the optimal
solution indicates that Product 3 is to most profitable product garners a total profit of ₱29,120.00
and a Net Profit of ₱11,648.00 with Costs of Goods Sold from Suppliers of Materials and the
businesses’ manufacturing and assembly costs. In the second data set with the inclusion of
Freight-Out cost, the total profit increased given a different Capital Budget for each of the Costs
provided that the business expressed the Freight-Out costs change the cost computation and
budgeting. This Model amounted to a Total Profit of ₱36,400.00 and a Net Profit of ₱14,092.00.
Given the results of the model, the researchers recommend that the business considers
heightening the production of product 3 to even solely producing product 3 only as this will
result in the highest attainable profit given the current costs attributed to each product and the
budget available for each Cost of Goods Expense classification. The researchers also suggest
revisiting and revising the allocation of budget to each cost Classification as this can
significantly change the Optimal Product mix and Total Profit attained.
VI. Appendix
Curbell Plastic Inc. (2022). EVA Flexible Copolymer | Ethylene Vinyl Acetate | Curbell Plastics.
Curbellplastics.com. https://www.curbellplastics.com/Research-Solutions/Materials/EVA
Fudamaxmktg. (2022a). ToteMate horizontal document and office bag with handle. Shopee;
https://shopee.ph/ToteMate-horizontal-document-and-office-bag-with-handle-i.78831349.
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4108-b7d0-f42afb2c18da
Fudamaxmktg. (2022b). ToteMate Muji Inspired High Quality EVA clear pouch and cases.
Shopee.ph.
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4-18c1-465a-88da-9128e2a0f7d3
https://shopee.ph/ToteMate-Muji-inspired-Stackable-Organizer-Blocks-i.78831349.34541
40007?sp_atk=a9db66a2-e510-44d0-a734-78062276e5a8&xptdk=a9db66a2-e510-44d0-
a734-78062276e5a8
https://shopee.ph/ToteMate-plain-mesh-tote-pouch-i.78831349.2342435196?sp_atk=da93
1dfa-6bf3-4e6b-a711-b01509198dea&xptdk=da931dfa-6bf3-4e6b-a711-b01509198dea
https://shopee.ph/ToteMate-white-mesh-EVA-pouch-organizer-i.78831349.7191027831?s
p_atk=da43e302-634e-4d39-a246-744c4341291a&xptdk=da43e302-634e-4d39-a246-74
4c4341291a
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ay=desc&search_query=plastic+container&p=2
https://smstationery.com.ph/collections/storage