Table 5.2 A Company Makes Four Products That Have the Following Characteristics

question 7

Multiple Choice

Table 5.2
A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce; Product B sells for $90 but needs $45 of materials and $20 of labor to produce; Product C sells for $110 but needs $50 of materials and $30 of labor to produce; Product D sells for $135 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 is 50 As, 60 Bs, 70 Cs, and 80 Ds 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 5.2. Using the bottleneck method, what is the optimal product mix?

• A) 37 A, 60 B, 70 C, 80 D
• B) 50 A, 51 B, 70 C, 80 D
• C) 50 A, 60 B, 62 C, 80 D
• D) 50 A, 60 B, 70 C, 60 D

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Definitions:

Egg Rolling

A traditional activity in which eggs are rolled on the ground, often associated with Easter celebrations.

Learning

Relatively permanent change in an animal’s behavior that results from practice and experience.

Behavior

Observable, coordinated responses to environmental stimuli.

Stimulus-Response

A concept in psychology and physiology describing how organisms respond to stimuli in their environment.