Reference no: EM132296992

?York-Perry Industries? (YPI) manufactures a mix of affordable guitars? (A, B,? C) that are fabricated and assembled at four different processing stations? (W, X,? Y, Z). The operation is a batch process with small setup times that can be considered negligible. The product information? (price, weekly? demand, and processing? times) and process sequences are shown below. Purchased parts and raw materials? (shown as a? per-unit consumption? rate) are represented by inverted triangles. YPI is able to make and sell up to the limit of its demand per week with no penalties incurred for not meeting the full demand. Each workstation is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid ?$11 per hour. The plant operates one? 8-hour shift per day and operates on a? 5-day work week? (i.e., 40 hours of production per person per? week). Overhead costs are? $9,000/week. $10 $9 $5 $5 Step 1 Step 1 Station W Station W Step 2 Step 2 Station Y Station Z Product A Product B Raw materials Raw materials (11 min) (8 min) (17 min) (10 min) Purchased part Step 1 Product C Step 2 Station X Purchased part Purchased part Raw materials Station W $16 $6 (17 min) (11 min) x y graph Step 3 Step 3 Station X Station Z Product: A Product: B (10 min) (9 min) Price: $95/unit Demand: 62 units/wk Demand: 88 units/wk Price: $85/unit Step 3 Station Y (4 min) Product: C Price: $105/unit Demand: 62 units/wk x y graph The senior management team wants to improve the profitability of the firm by accepting the right set of orders.? Currently, decisions are made using the traditional? method, which is to accept as much of the product with the highest contribution margin as possible? (up to the limit of its? demand), followed by the next highest contribution? product, and so on until all available capacity is utilized. Because the firm cannot satisfy all the? demand, the product mix must be chosen carefully. Jay? Perry, the newly promoted production? supervisor, is knowledgeable about the theory of constraints and the? bottleneck-based method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix. What is the change in profits? if, instead of the traditional method that YPI has used thus? far, the bottleneck method advocated by Jay is used for selecting the product? mix? What is the profit if the traditional method is used for determining? YPI's product? mix? ?(Note: When determining the product? mix, if the number of units to produce is not a whole? number, be sure to round down to the next whole number before proceeding with any profit? calculations.) The profit using the traditional method is ?$ nothing. ?(Enter your response rounded to the nearest whole? number.) Enter your answer in the answer box and then click Check Answer.