Table 5.1 A Company Makes Four Products That Have the Following Characteristics

question 127

Multiple Choice

Table 5.1
A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table.

Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.
-Use the information in Table 5.1. Using the bottleneck method, in what sequence should products be scheduled for production?

• A) D, C, B, A
• B) D, C, A, B
• C) C, D, A, B
• D) C, D, B, A

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Definitions:

Cash Balance

The total amount of cash in a company's accounts at any given time.

December

In the Gregorian calendar, the year concludes with its twelfth month.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.

Inventory

The total amount of goods and materials held by a company awaiting sale or use in production.