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Cooper River Glass Works (CRGW) produces four different models of desk lamps as shown in Figure 6.15. The operations manager knows that total monthly demand exceeds the capacity available for production. Thus, she is interested in determining the product mix that will maximize profits. Each model’s price, routing, processing times, and material cost are provided in Figure 6.15. Demand next month is estimated to be 200 units of model Alpha, 250 units of model a. Which station is the bottleneck? b. Using the traditional method, which bases decisions solely on a product’s contribution to profits and overhead, what is the optimal product mix and what is the overall profitability? c. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability ?

Cooper River Glass Works (CRGW) produces four different models of desk lamps as shown in Figure 6.15. The operations manager knows that total monthly demand exceeds the capacity available for production. Thus, she is interested in determining the product mix that will maximize profits. Each model’s price, routing, processing times, and material cost are provided in Figure 6.15. Demand next month is estimated to be 200 units of model Alpha, 250 units of model a. Which station is the bottleneck? b. Using the traditional method, which bases decisions solely on a product’s contribution to profits and overhead, what is the optimal product mix and what is the overall profitability? c. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability ?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Cooper River Glass Works (CRGW) produces four different models of desk lamps as shown in Figure 6.15. The operations manager knows that total monthly demand exceeds the capacity available for production. Thus, she is interested in determining the product mix that will maximize profits. Each model’s price, routing, processing times, and material cost are provided in Figure 6.15. Demand next month is estimated to be 200 units of model Alpha, 250 units of model

a. Which station is the bottleneck?

b. Using the traditional method, which bases decisions solely on a product’s contribution to profits and overhead, what is the optimal product mix and what is the overall profitability?

c. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability ?

 

 

 

 

Alpha $10 Raw materials Bravo $10 Raw materials Charlie $8 Raw materials Delta $5 Raw materials Step 1 At station 1 (10 min) Step 1 At station 1 (5 min) Step 1 At station 1 (20 min) Step 2 At station 2 (5 min) Step 1 At station 2 (20 min) Step 2 At station 2 (15 min) Step 2 At station 2 (5 min) Step 3 At station 3 (15 min) Step 2 At station 3 (10 min) Step 3 At station 3 (5 min) Step 3 At station 3 (10 min) Step 4 At station 4 (10 min) Step 4 At station 4 (20 min) Step At station 4 (10 min) Product: Alpha Price: $80/unit Demand: 200 units/wk Product: Bravo Price: $95/unit Demand: 250 units/wk Product: Charlie Price: $90/unit Demand: 150 units/wk Product: Delta Price: $70/unit Demand: 225 units/wk ◄FIGURE 6.15 Cooper River Glass Works Flowchart
Transcribed Image Text:Alpha $10 Raw materials Bravo $10 Raw materials Charlie $8 Raw materials Delta $5 Raw materials Step 1 At station 1 (10 min) Step 1 At station 1 (5 min) Step 1 At station 1 (20 min) Step 2 At station 2 (5 min) Step 1 At station 2 (20 min) Step 2 At station 2 (15 min) Step 2 At station 2 (5 min) Step 3 At station 3 (15 min) Step 2 At station 3 (10 min) Step 3 At station 3 (5 min) Step 3 At station 3 (10 min) Step 4 At station 4 (10 min) Step 4 At station 4 (20 min) Step At station 4 (10 min) Product: Alpha Price: $80/unit Demand: 200 units/wk Product: Bravo Price: $95/unit Demand: 250 units/wk Product: Charlie Price: $90/unit Demand: 150 units/wk Product: Delta Price: $70/unit Demand: 225 units/wk ◄FIGURE 6.15 Cooper River Glass Works Flowchart
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