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The senior management at Davis Watercraft would like to determine if it is possible to improve firm profitability by changing their existing product mix. Currently, the product mix is determined by giving resource priority to the highest contribution margin watercrafts. Davis Watercraft always has a contingent of 10 workers on hand; each worker is paid $28 per hour. Overhead costs are $15,000 per week. The plant operates 18 hours per day and 6 days per week. Labor is considered a fixed expense because workers are paid for their time regardless of their utilization. The production manager has determined that workstation 1 is the bottleneck. Detailed production information is provided below. D i Price Material costs Weekly demand Processing Time Station 1 Processing Time Station 2 Processing Time Station 3 Processing Time Station 4 The total profit under the new method is $ Product mix a. Using the traditional method, which bases decisions solely on a product's contribution to profits and overhead, what is the product mix that yields the highest total profit? (Enter your responses rounded to the nearest whole number.) A Product mix A $385 $55 90 66 0 0 11 22 A Model B $355 $45 68 (Enter your response rounded to the nearest whole number.) B | The total profit under the traditional method is $. (Enter your response rounded to the nearest whole number.) b. Using the bottleneck-based method, what is the product mix that yields the highest total profit? (Round your answers to the nearest whole number and ignore the violations on constraints due t rounding.) 0 9 0 66 33 C $425 $105 36 33 35 66 0 44 B с с

The senior management at Davis Watercraft would like to determine if it is possible to improve firm profitability by changing their existing product mix. Currently, the product mix is determined by giving resource priority to the highest contribution margin watercrafts. Davis Watercraft always has a contingent of 10 workers on hand; each worker is paid $28 per hour. Overhead costs are $15,000 per week. The plant operates 18 hours per day and 6 days per week. Labor is considered a fixed expense because workers are paid for their time regardless of their utilization. The production manager has determined that workstation 1 is the bottleneck. Detailed production information is provided below. D i Price Material costs Weekly demand Processing Time Station 1 Processing Time Station 2 Processing Time Station 3 Processing Time Station 4 The total profit under the new method is $ Product mix a. Using the traditional method, which bases decisions solely on a product's contribution to profits and overhead, what is the product mix that yields the highest total profit? (Enter your responses rounded to the nearest whole number.) A Product mix A $385 $55 90 66 0 0 11 22 A Model B $355 $45 68 (Enter your response rounded to the nearest whole number.) B | The total profit under the traditional method is $. (Enter your response rounded to the nearest whole number.) b. Using the bottleneck-based method, what is the product mix that yields the highest total profit? (Round your answers to the nearest whole number and ignore the violations on constraints due t rounding.) 0 9 0 66 33 C $425 $105 36 33 35 66 0 44 B с с

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter4: Linear Programming Models
Section: Chapter Questions
Problem 111P
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The senior management at Davis Watercraft would like to determine if it is possible to improve firm profitability by changing their existing product mix. Currently, the product mix is determined by giving resource priority to the highest contribution margin watercrafts. Davis Watercraft always has a contingent of 10 workers on hand; each worker is paid $28 per hour. Overhead costs are $15,000 per week. The plant operates 18 hours per day and 6 days per week. Labor is considered a fixed expense because workers are paid for their time regardless of their utilization. The production manager has determined that workstation 1 is the bottleneck. Detailed production information is provided below. Price Material costs Weekly demand Processing Time Station 1 Processing Time Station 2 Processing Time Station 3 Processing Time Station 4 Product mix A $385 $55 90 66 Product mix A | 0 11 22 A Model B a. Using the traditional method, which bases decisions solely on a product's contribution to profits and overhead, what is the product mix that yields the highest total profit? (Enter your responses rounded to the nearest whole number.) The total profit under the new method is $. (Enter your response rounded to the nearest whole number.) B $355 $45 co 68 0 0 0 66 33 B с $425 $105 36 The total profit under the traditional method is $. (Enter your response rounded to the nearest whole number.) b. Using the bottleneck-based method, what is the product mix that yields the highest total profit? (Round your answers to the nearest whole number and ignore the violations on constraints due to rounding.) с 33 66 0 44 D C
Transcribed Image Text:The senior management at Davis Watercraft would like to determine if it is possible to improve firm profitability by changing their existing product mix. Currently, the product mix is determined by giving resource priority to the highest contribution margin watercrafts. Davis Watercraft always has a contingent of 10 workers on hand; each worker is paid $28 per hour. Overhead costs are $15,000 per week. The plant operates 18 hours per day and 6 days per week. Labor is considered a fixed expense because workers are paid for their time regardless of their utilization. The production manager has determined that workstation 1 is the bottleneck. Detailed production information is provided below. Price Material costs Weekly demand Processing Time Station 1 Processing Time Station 2 Processing Time Station 3 Processing Time Station 4 Product mix A $385 $55 90 66 Product mix A | 0 11 22 A Model B a. Using the traditional method, which bases decisions solely on a product's contribution to profits and overhead, what is the product mix that yields the highest total profit? (Enter your responses rounded to the nearest whole number.) The total profit under the new method is $. (Enter your response rounded to the nearest whole number.) B $355 $45 co 68 0 0 0 66 33 B с $425 $105 36 The total profit under the traditional method is $. (Enter your response rounded to the nearest whole number.) b. Using the bottleneck-based method, what is the product mix that yields the highest total profit? (Round your answers to the nearest whole number and ignore the violations on constraints due to rounding.) с 33 66 0 44 D C
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