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

question 135

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 traditional method, which product should be scheduled first?

• A) Product A
• B) Product B
• C) Product C
• D) Product D

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Definitions:

Variability

A statistical measure of the dispersion of data points in a data series around the mean.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, commonly the mean, median, or mode.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in a data set differ from the mean.

Computing Mean

The process of calculating the average value of a set of numbers by adding them together and dividing by the quantity of numbers.