Explaining the Profit Inequality Model for a Maintenance Business
As an assistant manager at a commercial landscaping and maintenance company, you are training a new operations supervisor on how the business plans its monthly operations to ensure profitability.
Write a short essay (2–3 paragraphs) explaining how to construct the profit inequality used to determine the minimum number of jobs () needed to achieve a target profit. In your explanation, ensure you do the following:
- Recall and define the three main financial components (revenue per job, monthly fixed expenses, and target profit) used in this business model.
- State the mathematical relationship among these three components that represents the profit inequality (i.e., how revenue and expenses are combined relative to the target profit).
- State the specific algebraic inequality used in our business scenario where the company charges $60 per job, has monthly fixed expenses of $1,100, and has a minimum monthly profit goal of $4,000.
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As a manager of a maintenance business, you use the algebraic model to track your profitability. Match each component of this inequality to the specific business factor it represents.
A landscaping business uses the inequality to determine the number of jobs () needed to meet a monthly profit target of 4,000. Arrange the following steps in the correct order to solve this inequality for .
Based on the maintenance business example provided, what is the minimum number of jobs () that must be completed to achieve a monthly profit of at least {}4,000?
Mathematical Representation of 'At Least'
To determine if a landscaping business meets its target profit using the inequality , the model adds the monthly expenses to the revenue generated by the jobs.
To calculate the number of jobs () your maintenance business must complete to meet a specific profit target, you set up an inequality that represents the total ____ minus your monthly expenses.
Explaining the Profit Inequality Model for a Maintenance Business