Reference no: EM131420028
Senior Management at Super Value Works (SVW) would like you to help pick the mix of products that they should sell. SVW has 10 workers on hand and each is paid $25 per hour. Overhead costs and $35,000 per week. The manufacturing plant consists of 4 stations and operates 16 hours per day and 6 days per week. Labor is a fixed cost because workers are paid for their time regardless of their utilization. The product information below outlines the 3 models of product that they produce and the associate costs for producing each product.
Product A Product B Product C
Unit Price $400 $450 $550
Unit Material Cost $50 $140 $110
Weekly Demand 100 75 40
Station 1 Processing Time 60 min 0 min 30 min
Station 2 Processing Time 20 min 0 min 60 min
Station 3 Processing Time 25 min 60 min 0 min
Station 4 Processing Time 10 min 30 min 40 min
a. Identify the bottleneck resource (station). Show your work load calculations you use or explain the logic you used to determine the bottle. You will not get full credit if you only give a station number.
b. If we prioritize A, B, and C for their unit profit values, what would the weekly production plan (quantities / mix of A, B, C produced each week) be and the resulting profit?
c. If we prioritize A, B, and C using the bottleneck ratio method, what would the weekly production plan be and the resulting profit?
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: Senior Management at Super Value Works (SVW) would like you to help pick the mix of products that they should sell. SVW has 10 workers on hand and each is paid $25 per hour. The product information below outlines the 3 models of product that they pro..
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