King Supply makes four different types of plumbing fixtures: W,X, Y and Z. The contribution margins for these products are: $70for Product W, $60 for Product X, $90 for Product Y and $100 forProduct Z. Fixed overhead is estimated at $5,500 per week. Themanufacture of each fixture requires four machines, Machines #1, 2,3 and 4. Each of the machines is available for 40 hours a week andthere is no setup time required when shifting from the productionof one product to any other. The processing requirements to makeone unit of each product are shown in the table. Weekly productdemand for the next planning period has been forecasted as follows:70 Ws, 60 Xs, 50 Ys and 30 Zs.
King Supply Makes Four Different Types Of Plumbing Fixtures W X Y And Z The Contribution Margins For These Products 1 (97.13 KiB) Viewed 11 times
In the questions that follow, the traditional method refers tomaximizing the contribution margin per unit for each product, andthe bottleneck method refers to maximizing the contribution marginper minute at the bottleneck for each product.
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1. Which machine is the bottleneck operation?2. Using the traditional method, in what sequence should thefixtures be scheduled for production?3. Using the traditional method, what is the optimal productmix?4. Using the traditional method, what is the profit if King Supplymanufactures the optimal productmix?5. Using the bottleneck method, in what sequence should products bescheduled for production?6. Using the bottleneck method, what is the optimal productmix?7. Using the bottleneck method, what is the profit if Burdellmanufactures the optimal productmix?
Fixture W X Y Z Processing Time (Minutes Per Fixture) Machine 1 Machine 2 Machine 3 Machine 4 10 15 10 5 5 10 15 10 20 5 5 10 15 5 5 10
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