A Company Produces Three Different Products That All Require Processing

question 97

Essay

A company produces three different products that all require processing on the same machines.There are only 27,000 machine hours available in each year.Production information for each product is:
$\begin{array}{lrrr}&\text { A}&\text { B}&\text { C}\\ \text { Sales price per unit } & \$ 20.00 & \$ 38.00 & \$ 35.00 \\\text { Variable costs per unit } & \$ 12.00 & \$ 26.00 & \$ 17.00 \\\text { Machine hours necessary to produce one } & 2.5 & 4.0 & 4.50\\\text { unit } \end{array}$

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 5,000 units for each product.
c.Determine the preferred sales mix if the demand is limited to 3,000 units for each product.

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Definitions:

Problem-solving Strategy

An approach or method specifically designed and used to find solutions to difficult or complex issues.

Nondeclarative Memory

Refers to the type of long-term memory that implies the recall of skills and habits, sometimes known as implicit memory, which operates without conscious awareness.

Outcome Simulation

The practice of envisioning the possible outcomes of different decisions to aide in choice making, often used in clinical and psychological settings.

Employer Branding

The strategy of positioning a company as the preferred employer for a specific desired demographic, which the company aims to attract and keep.