Chapter 7 Tif

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Table 7.5 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. | Processing Time (min/unit) | Work Center | A | B | C | D | W | 6 | 1 | 3 | 12 | X | 9 | 10 | 4 | 8 | Y | 4 | 3 | 12 | 9 | Z | 10 | 0 | 7 | 11 | Work centers W, X, Y, and Z are available for 40 hours per week and have no setup…show more content…
Fixed overhead is estimated at $5,000 per week. The manufacture of each printer requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 80 E-1000s; 65 S-2000s; 35 P-2000s; and 20 N-1000s. | Processing Time (Minutes Per Printer) | Model | Machine 1 | Machine 2 | Machine 3 | Machine 4 | E-1000 (E) | 10 | 15 | 15 | 5 | S-2000 (S) | 10 | 10 | 10 | 10 | P-2000 (P) | 5 | 10 | 15 | 10 | N-1000 (N) | 5 | 5 | 5 | 10 | In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. 46. Use the information in Table 7.6. Which machine is the bottleneck operation? Machine 3 47. Use the information in Table 7.6. Using the traditional method, which product should be scheduled first? Product E 48. Use the information in Table 7.6. Using the traditional method, in what sequence should products be scheduled for production? E, S, P, N 49. Use the information in Table 7.6. Using the traditional method, what is the optimal

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