How Much Is Too Much?
Lesson Plan
Algebra Business Project
Application to Industrial Engineering
Inventory Management
Subject:
Algebra I
Author(s): Melinda Stubbs, Houston ISD
Beatrice Martinez, Lyford CISD
Concepts:
*To involve students in the real world application of the engineering
and mathematics that is all around them
*To expose students to situations faced everyday by industrial
engineers in determining the ordering quantity for a place of business
to ensure a maximum profit…i.e….Inventory Management
*To emphasize to students the importance of unselfishly giving to
others
Objectives:
The student will
*calculate unit cost.
*use interest formulas.
*determine, graph, and compare linear equations.
*model and understand randomness.
*make decisions in uncertain environments
*calculate relative frequency.
*create a cumulative distribution function.
*create a histogram of a binomial distribution.
*create bar graphs and calculate mean, median, mode, and range.
*interpret, analyze, and compare linear graphs.
Prior Knowledge Required:
*understanding of randomness
*calculating basic probability
*calculating and understanding simple interest
*calculating and understanding permutations and combinations
(factorials)
Description:
Students will be ‘involved’ in starting their own business. They will
interview for a $50 loan with one of our teachers on campus who has
graciously offered to invest their money in the students company / business.
Students will negotiate an interest rate, which is to be paid back along with
the principle of $50 within a 2-week period (each week represents 1 year).
They will use this loan to purchase any initial materials required to start up
their business. All businesses will be based on the selling of perishable
products in order for students to understand the application of industrial
engineering and the concept of random demands. At the end of the project,
all profits made will be used to purchase Christmas gifts for needy families
in our community.
Materials for each team:
*journal book
*accounting logbook
*accordion folder
*business card paper
*colored paper
*TI-83 graphing calculators
*video camera (available for checkout)
*computer with graphing and graphics software
Procedure:
ALL DISCUSSIONS, TRANSACTIONS, DECISIONS, ETC., NEED TO
BE RECORDED IN YOUR JOURNALS
1. Teams of 4 will be selected at RANDOM to work on this project.
Discussion: What does the term ‘random’ mean and how do you
suggest that we select our teams to ensure randomness?
2. Select from the following perishable products which you will be
selling throughout our school, church, community, etc.,
-hot dogs
-hamburgers
-pizza slices
-homemade chocolate pretzels (1 unit = ½ dozen)
-homemade tacos
-homemade cookies or cupcakes
** Teams will be allowed to choose the same product, but your
demand may not be as high because of the competition.
3. Select a company name, product name, a president in charge of
overseeing all transactions, a vice-president in charge of making
purchases, a secretary in charge of your journal, and a treasurer in
charge of the accounting log.
4. Determine the cost of the initial purchase, the unit cost (c) of your
product, and the retail price (r) for the product as well. Use Activity 1
worksheet to help determine these values.
5. Assign random variable D to represent the number of units that you
expect to sell. Determine and graph the predicted cost (C), revenue
(R), earnings (E) and profit (T) equations. Use the graphing program
at the computer lab to create your graphs.
6. Conduct a brief survey (at least 40 students) to help you predict the
likelihood (probability) that students will buy your product. Assign
(p) the probability that students will buy your product.
7. Use Activity 2 worksheet, (which simulates the randomness of the
demand for the number of products each day), to help determine the
number of units to be brought each day in order to maximize your
profit. This activity sheet will guide you through the simulation, show
you how to compute the relative frequency, graph the cumulative
distribution function, show you the results of a binomial distribution
function for probability by plotting histograms on your graphing
calculators, and help you determine the best quantity to bring each
day.
8. Create a power point presentation to present to your lender. Your
presentation should include a summary of the information and
findings for steps 1 thru 7.
9. Schedule an interview with your lender who will be randomly
assigned to you at the beginning of this project. Your lender will have
a list of questions (given by me) for you to answer…be prepared. It is
important that you dress appropriately for the interview…no blue
jeans, T-shirts, nor tennis shoes…Also be sure to negotiate your
interest rate…remember you will be paying back the principle +
interest…(show work on journal for calculating the simple interest for
two weeks…each week represents 1 year). Your lender will have an
evaluation sheet for your interview to fill out for me.
10.Once your loan has been approved, and the contract has been signed, I
will set up an account for your company in the classroom. At that
time, your president will receive your $50 loan. Deposits should be
made on a daily basis to me and withdrawals can be done as
necessary. All deposit and withdrawal slips need to be approved and
signed by your president and treasurer.
11.Create a commercial to advertise your product…(check out video
camera when you are ready). All commercials will be aired over
Channel One daily. It must include a jingle, and mention your
company name and product. Also create business cards to distribute
using a software program, such as Print Master Gold, at the computer
lab and create flyers to post up in the hallways.
12.Purchase initial items to get your business under way! Keep receipts
and document all purchases, deposits, changes, etc., [CLEAR ALL
DONATION WITH ME FIRST!]
13. Start selling!!! Record everything in your journal!…Have
Fun!!…since there are 4 of you, you should take turns preparing your
product each day. It is not necessary for you to sell your product
every day, but do consider the loss in profit if you do not sell for that
day.
14.After sales, create bar graphs for each days sales…calculate the mean,
median, mode, and range for all ten days…calculate the interest that is
to be paid to your lender and repay the principle + the interest (include
a Thank You card and maybe a small gift)…
15.Substitute the total number of units sold (D) in for your equations for
cost, revenue, and earnings…Compare the actual earnings / profit that
you obtained throughout the two weeks with the equations that you
formulated. Plot your points on your graph to show if there are any
discrepancies. Address these in your journals.
16.In your journal, write a one-page summary answering the questions on
Activity worksheet 3…you will be graded on punctuation, grammar,
and spelling.
17.Depending on the overall class profit, we will be getting together on
the Saturday after the project is over. Each team will be assigned a
family in our community to purchase gifts for. You will receive a list
of all the family members, their ages, and their interests. We will set
a price limit for each gift. We will also purchase a heater and a couple
of blankets for each family. We will wrap these gifts and deliver them
on the last day of school before our Christmas breaks. The gifts will
be a surprise to the families…the only family members informed of
our visit will be one of the parents.
Grading Criteria:
You will be receiving 6 grades for this project based on the following.
Grade 1:
Overall Profit
Grade 2:
Interview &
Summary
Grade 3:
Journals
Grade 4:
Activity Sheets
Graphs
Grade 5:
Advertising
Grade 6:
Teamwork
>= $150
$100 - $149
$50 - $99
Loss - $49
90-100
80-89
70-79
60-69
Total points earned:
Total points earned:
Based on Evaluation 40 pts
One page essay
60 pts
20 or more
15 to 19
10 to 14
Less than 10
90-100
80-89
70-79
60-69
Total points earned:
Activity Sheet 1
25 pts
Activity Sheet 2
50 pts
Graphs / equations 25 pts
Total points earned:
Commercial
Flyers
Business cards
50 pts
30 pts
20 pts
Total points earned:
Team works well
Team has minor
Conflicts
Team has major
Conflicts
90-100
Total points earned:
80-89
70-79
Extensions:
Airline Overbooking Activity:
*http://www.hsor.org/modules.cfm?name=Frankfurter_High