Cooper River Glass Works (CRGW) produces four different models of desk lamps as shown in Figure 6.15. The operations manager knows that total monthly demand exceeds the capacity available for production. Thus, she is interested in determining the product mix that will maximize profits. Each model’s price, routing, processing times, and material cost are provided in Figure 6.15. Demand next month is estimated to be 200 units of model Alpha, 250 units of model a. Which station is the bottleneck? b. Using the traditional method, which bases decisions solely on a product’s contribution to profits and overhead, what is the optimal product mix and what is the overall profitability? c. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability ?

Cooper River Glass Works (CRGW) produces four different models of desk lamps as shown in Figure 6.15. The operations manager knows that total monthly demand exceeds the capacity available for production. Thus, she is interested in determining the product mix that will maximize profits. Each model’s price, routing, processing times, and material cost are provided in Figure 6.15. Demand next month is estimated to be 200 units of model Alpha, 250 units of model a. Which station is the bottleneck? b. Using the traditional method, which bases decisions solely on a product’s contribution to profits and overhead, what is the optimal product mix and what is the overall profitability? c. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability ?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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