The Constraint at Mirsch Inc Each Unit of Product B01 Requires 9 Ounces of the of 9,600

question 1

Essay

The constraint at Mirsch Inc.is a key raw material.A total of 9,600 ounces of this constrained resource are available.Data concerning the company's two products,B01 and P46,appear below: $$\begin{array} { l r r } & { \text { B01 } } & { \text { P46 } } \\\text { Demand (units) ...... } & 660 & 570 \\\text { Selling price .......... } & \$ 261.00 & \$ 276.00 \\\text { Variable cost ......... } & \$ 234.90 & \$ 248.40\end{array}$$ Each unit of product B01 requires 9 ounces of the constrained raw material;each unit of product P46 requires 12 ounces.
Required:
a.In the present circumstances,which product is most profitable?
b.How much of each product should be produced?
c.The company is considering launching a new product whose variable cost is $210 and that requires 9 ounces of the constrained resource.What is the minimum acceptable selling price for the new product?

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Definitions:

Vicious Circle

A complex chain of events that reinforce themselves through a feedback loop, leading to a detrimental situation.

Poverty

A state or condition in which individuals or communities lack the financial resources and essentials for a minimum standard of living.

Capital-Using Technologies

Innovations that increase the efficiency of capital usage, often leading to higher productivity but possibly requiring more initial investment.

Capital-Saving Technologies

Innovations that allow for the same level of production using fewer inputs of capital, usually leading to cost savings and increased efficiency.