Using the information below answer the following questions a) What is the bottleneck in the process – show your work by demonstrating the workload by product and station. b) Using the traditional (margin) based model what is the order of priority of the 4 products, and how many of each can they produce BY MONTH. Show your math for determining the order of priority and for determining the number of units c) Using the bottle keck based model what is the order of priority of the 4 products, and how many of each can they produce BY MONTH. Show your math for determining the order of priority and for determining the number of units d) What is the profit using the traditional method – show your math e) What is the profit using the bottleneck method – show your math The factory runs one 8-hour shift per day per station, operates five days a week. The skilled employees get paid $25 / hour. In addition, the factory has a weekly overhead of $2000. Due to uncertainty in the demand planning, management has agreed on a 15% capacity cushion.
Using the information below answer the following questions a) What is the bottleneck in the process – show your work by demonstrating the workload by product and station. b) Using the traditional (margin) based model what is the order of priority of the 4 products, and how many of each can they produce BY MONTH. Show your math for determining the order of priority and for determining the number of units c) Using the bottle keck based model what is the order of priority of the 4 products, and how many of each can they produce BY MONTH. Show your math for determining the order of priority and for determining the number of units d) What is the profit using the traditional method – show your math e) What is the profit using the bottleneck method – show your math The factory runs one 8-hour shift per day per station, operates five days a week. The skilled employees get paid $25 / hour. In addition, the factory has a weekly overhead of $2000. Due to uncertainty in the demand planning, management has agreed on a 15% capacity cushion.
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Question
Using the information below answer the following questions
a) What is the bottleneck in the process – show your work by demonstrating the workload
by product and station.
b) Using the traditional (margin) based model what is the order of priority of the 4 products,
and how many of each can they produce BY MONTH. Show your math for determining
the order of priority and for determining the number of units
c) Using the bottle keck based model what is the order of priority of the 4 products, and
how many of each can they produce BY MONTH. Show your math for determining the
order of priority and for determining the number of units
d) What is the profit using the traditional method – show your math
e) What is the profit using the bottleneck method – show your math
The factory runs one 8-hour shift per day per station, operates five days a week. The skilled
employees get paid $25 / hour. In addition, the factory has a weekly overhead of $2000. Due to
uncertainty in the demand planning, management has agreed on a 15% capacity cushion.
a) What is the bottleneck in the process – show your work by demonstrating the workload
by product and station.
b) Using the traditional (margin) based model what is the order of priority of the 4 products,
and how many of each can they produce BY MONTH. Show your math for determining
the order of priority and for determining the number of units
c) Using the bottle keck based model what is the order of priority of the 4 products, and
how many of each can they produce BY MONTH. Show your math for determining the
order of priority and for determining the number of units
d) What is the profit using the traditional method – show your math
e) What is the profit using the bottleneck method – show your math
The factory runs one 8-hour shift per day per station, operates five days a week. The skilled
employees get paid $25 / hour. In addition, the factory has a weekly overhead of $2000. Due to
uncertainty in the demand planning, management has agreed on a 15% capacity cushion.
Transcribed Image Text:Alpha
$10
Raw materials
Bravo
$10
Raw materials
Charlie
$8
Raw materials
Delta
$5
Raw materials
Step 1
At station 1
(10 min)
Step 1
At station 1
(5 min)
Step 1
At station 1
(20 min)
Step 2
At station 2
(5 min)
Step 1
At station 2
(20 min)
Step 2
At station 2
(15 min)
Step 2
At station 2
(5 min)
Step 3
At station 3
(15 min)
Step 2
At station 3
(10 min)
Step 3
At station 3
(5 min)
Step 3
At station 3
(10 min)
Step 4
At station 4
(10 min)
Step 4
At station 4
(20 min)
Step 4
At station 4
(10 min)
Product: Alpha
Price: $80/unit
Demand: 200 units/wk
Product: Bravo
Price: $95/unit
Demand: 250 units/wk
Product: Charlie
Price: $90/unit
Demand: 150 units/wk
Product: Delta
Price: $70/unit
Demand: 225 units/wk
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Step 1: State the given information
VIEWStep 2: a) Find the bottleneck in the process
VIEWStep 3: b) Use traditional margin based model to find priority order & production quantity of products
VIEWStep 4: c) Use bottleneck based model to find priority order & production quantity of products
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