A Company Produces Three Different Products That All Require Processing

question 63

Essay

A company produces three different products that all require processing on the same machines.There are only 17,000 machine hours available in each year.Production information for each product is:
$\begin{array}{lccc}&\underline { \mathrm { A } } & \underline { \mathrm { B } } & \underline { \mathrm { C } } \\ \text { Sales price per unit } & \$ 22.00 & \$ 34.00 & \$ 46.00 \\\text { Variable costs per unit } & \$ 10.00 & \$ 19.00 & \$ 25.30 \\\text { Machine hours necessary to produce one unit } & .75 & 1.2 & 2.3\end{array}$
Required:
a.Determine the preferred sales mix if there are no market constraints on any of the products.
b.Determine the preferred sales mix if the demand is limited to 7,000 units for each product.
c.Determine the preferred sales mix if the demand is limited to 8,000 units for each product.

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Definitions:

Bargaining Power

The capacity of one party to influence or exert pressure in negotiations to sway outcomes in their favor, often determined by their resources or alternatives.

Selling A Contract

The process of persuading or influencing union members to agree with and accept the terms of a newly negotiated contract with employers.

Centralized Bargaining

A form of negotiation where a single set of talks between labor unions and employers determines conditions for multiple workplaces or employees.

Intra-Party Bargaining

The process of negotiation and decision-making within a single political party or group, especially regarding policies or leadership positions.