IS102CAT Mid-Term Test

Sample 3

You should sit at the seat number indicated below. As soon as you are seated, please
write clearly your name and SMU email userID in the spaces provided below.
Seat number:_______________
Name: ________________________________

email userID:_______________

Time: 1.5 hours

Requirements: Open book, Computer with Excel.
Restrictions: No communications of any kind (i.e. mobile phone, email, chat, etc.).
This test comprises question 1 (5 marks), question 2 (10 marks) and question 3 (10
marks), giving a total of 25 marks.
Please do not turn over this page until the professor gives the instruction to do so.

For each question, it is advisable to read through all parts first before attempting to do
any part.
Write your answers in the spaces provided in each question and submit this booklet at
the end of the test.
Softcopy submission of your working is not required.

Question

Mark

1
2
3
Total

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Question 1 (5 marks)
The orders for goods for the export company come from all over the world. Their major
exporting countries, in order of importance, are India, the United States, Malaysia and
China. They also receive occasional orders from Thailand, the United Kingdom and
Indonesia. The cost to the company for exporting to each of these countries is different.
As such, it has prepared a price table which lists the price for each of these major
countries. To keep the price list short, there is also an other countries price to deal
with all other countries not listed in it. For the start, the orders from other countries will
have their country entry in the input cell as Other countries.
a. Use the template below to complete the spreadsheet model for this problem. Cells
B4:C4 and B10:C17 contain input values. Fill in all the empty cells in the template
with your solution values and provide the missing formulas for the listed key cells in
the spaces provided below the template.
(3 marks)

Formulas for the following key cells are

Unit price

D4

______________________________________________
______________________________________________
______________________________________________

Total price

E4

______________________________________________

b. To better track the other countries, the company wants to identify them individually.
These countries names should now be entered as they are and no longer vaguely as
other countries.
(1 mark)
Revise the formula for cell D4 to accommodate this new requirement.
Hint: You will need to use the ISNA function.

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Unit price

D4

______________________________________________
______________________________________________
______________________________________________
______________________________________________
______________________________________________

c. Next, you expect the price list to be extended with more countries being explicitly
named while still keeping other countries as its last entry. Your spreadsheet model
may not work correctly any more with such changes.
(1 mark)
Revise the formula for cell D4 again as a further refinement to your model.
Hint: You will need to use the OFFSET function.
Unit price

D4

______________________________________________
______________________________________________
______________________________________________
______________________________________________
______________________________________________
______________________________________________
______________________________________________

2010Term1/LTY

Question 2 (10 marks)

Investing in a luxury cruise ship is a very large financial commitment. The capital cost is
enormous and the service being very labor intensive also implies a substantial operating
cost, notwithstanding the costs to operate and maintain the vessel. The profitability of
the business would hinge on getting the right customer patronage and charging
adequately handsome rates.
a. Use the template below to complete the spreadsheet model for this problem. Cells
D4:H4, D5, D6:H6, D9:D11, D14, D17:D18, D21, and D25 contain input values. Fill in
all the empty cells in the template with your solution values and provide the formulas
for the listed key cells in the spaces provided below the template.
(4 marks)

Formulas for the following key cells are:

Revenue
Depreciation

D7

______________________________________

D12 =(D9-D10)/D11

Vessel operating cost

D15 ______________________________________

Crew variable cost

D19 ______________________________________

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Service variable cost

Total variable cost
Overhead cost
Profit

b.

D22 ______________________________________
D23 =D19+D22
D26 ______________________________________
D28 =D7-$D12-$D15-D19-D26

Profit margin

D29 ______________________________________

Breakeven revenue rate

D30 ______________________________________

At a revenue rate of $800 per passenger per day,

(2 marks)

the expected annual revenue is $_______________,

the expected annual profit is $_______________,
the expected annual margin _______________ % , and
the breakeven revenue rate is $_______________.
c.

From the completed model, the best solution is when

(2 marks)

the expected annual revenue is $_______________,

the expected annual profit is $_______________,
the expected annual margin _______________ % , and
the breakeven revenue rate is $_______________,.
d.

Considering how the profit changes with the revenue rate, the optimal solution can
be found when the model is further extended as follows: [explain below] (2 marks)

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Question 3 (10 marks)

Container ships are the main type of ships carrying general cargo. Its advantages lie in
the speedier and safer handling of cargo. These ships are getting larger, keeping in step
with increases in trade volume. The main driver for the increasing size of new container
vessels is that larger vessels have lower cost per unit capacity. This can be deduced from
the published data on new build costs. Twenty-foot equivalent unit (TEU) capacity of a
container vessel is the number of containers it can carry if all containers are broken
into twenty-foot units.
a. Use the template below to complete the spreadsheet model for this problem. Cells
E4:F4, and B7:C32 contain input values. Fill in the empty cells up to row 8 in the
template with your solution values and provide the formulas for key cells in the
spaces provided below the template.
(4 marks)

Formulas for the following key cells are

Factor

C4

___________________________________________

Index

D4

___________________________________________

Avg Abs Relative Error

H4

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{=AVERAGE(ABS(C7:C22-E7:E22)/C7:C22)}

Actual unit cost

D7

_______________________________

Model new build cost

E7

_______________________________

Model unit cost

F7

_______________________________

b. For a 5,000 TEU capacity vessel,

(2 marks)

the actual unit cost is ____________ US$ per TEU.

According to the model, the new build cost is US$ ____________,
with unit cost of ____________ US$ per TEU.
c. 20,000 TEU capacity vessels have not yet been built.

(2 marks)

For such a vessel, according to the model, the new build cost should be
US$ ____________, with unit cost of ____________ US$ per TEU.
d. The average absolute relative error of the model is __________.

(2 marks)

From the magnitude of this value and review of the plot of actual versus model new
build cost, the model is [explain its accuracy]

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