Reference no: EM131716145

Enterprises manufactures three unique products (A, B, C) that are fabricated and assembled in four different workstations (W, X, Y, Z) using a small batch process. Each of the products visits every one of the four workstations, though not necessarily in the same order. Batch setup times are negligible. A flowchart that denotes the path each product follows through the manufacturing process is shown below, where each product’s price, demand per week, and processing times per unit are indicated as well. Inverted triangles represent purchased parts and raw materials consumed per unit at different workstations. O’Neill can make and sell up to the limit of its demand per week, and there are no penalties for not being able to meet all the demand. Each workstation is staffed by a worker dedicated to work on that workstation alone, and is paid $12 per hour. Variable overhead costs are $8000/week. The plant operates one 8-hour shift per day, or 40 hours/week.

a. Which of the four workstations W, X, Y, or Z has the highest total workload, and thus serves as the bottleneck for O’Neill Enterprises?

b. Calculate the optimal product mix and the profitability using traditional method.

c. Calculate the optimal product mix and the profitability using bottleneck method.