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Posted: December 28th, 2022

Linear Programming — Leadership in Business

Assignment Task
Linear Programming — Leadership in Business
Alex Matteo is a forma partner of a professional accounting firm who values education. Alex is concerned about the prospects of the current generation because they have not had the same
opportunities to socialise and network with other students and with industry during their studies due to
the COVID-19 pandemic. Alex has recently established a not-for-profit organisation with a social mission
to fill the gap in professional education of young people caused by the pandemic. The organisation is
called Leadership in Business and its rust major event will be a conference, primarily, for high school
students. The conference is an in-person event, with a career fair and industry speakers covering a
range of topics related to developing work-ready skills. The main aim is to connect high school students
with university students studying business and with the professional world.
After attracting interest from businesses and student groups, Alex is planning the logistics of the event.
The event will be held on a Saturday and Sunday from 10am to 5pm. The venue will only allow 300
attendees per day. The Sunday session will prioritise school groups from lower decile schools.
Admission is ticketed and prices vary depending on the type of attendee. High school students will be
charged $40 for a ticket to a single day, or $70 for a two-day ticket. A special rate of $20 for attendees
from a list of lower decile schools (pm-purchased and student ID required) will be available for the
Sunday only. University students and corporate guests will be charged $20 and S30, respectively, for a
single day ticket. While they are not the main targets, university students and corporate members would
like to ‘give back’ to help high school students and they also benefit from the chance to network.
Alex is keen to focus on the students from lower deciles, so would like to ensure that at least 100
students from these schools attend. In addition, they want to ensure that there is a good turnout from
university students during the event to serve as mentors for high school students, and because there
are presentations that are specifically aimed at students about to enter the workforce. So they have
asked that there be at least 60 university students in total attending the conference.
Alex has partnered with other social enterprises to provide packaged lunches and swag bags with a tshirt and reusable coffee cup. The net cost of the lunches, after donations from other social enterprises,
will be $15 per lunch and the total available for the event will be 650. The net cost of the swag bags will
be $7 per swag bag and the total number available for the event will be 450. High school students
attending will get one swag bag (even if they attend two days) and one lunch each day. University and
corporate guests will only get lunch.
Coffee and juice will also be available as part of the ticket price. High scholars can have two juices per
day. University students can get one coffee and one juice. Corporate guests can get two coffees. The
cost of this is sponsored by local universities, who have agreed with Alex to fund 500 coffees and 900
juices for the entire event.
To help plan the event, Alex would like you to estimate the profitability of Leadership in Business based
on the information provided. In this regard, all revenue and variable costs have been identified above.
Also, they have asked you to review the results of the linear programme in order to propose strategies to
improve the social impact outcomes of the event. You decide that a linear programme would be useful
for this.
Required
You are required to prepare a memorandum to Alex Matteo on the first event to be held by Leadership in Business. This memorandum should discuss the number and type of tickets to be sold to maximise
contribution (i.e. total revenue less total variable costs). Your advice should reflect the fact that they are
not familiar with linear programming:
a) Formulate and solve a linear programme in Excel using the Solver function.
b) Review the results of the linear programme to identify ways to improve capacity utilisation and social impact outcomes.
• Propose one area where further investment would help to improve the capacity utilisation for the
event. Refer to the linear programming results to justify your selection and describe the potential
impact.
• Propose one way to further improve the social objective outcomes of the event. This should refer tofacts in the case where possible.

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