Answered: The Kitchen Company manufactures two… | bartleby

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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**Question #2**

The Kitchen Company manufactures two products: upper Wood cabinets and lower countertop cabinets, which are handled in five departments: cut Wood, cut Stone, sanding, finishing, and assembly. Cabinets are made of bare Wood. Countertops necessitate the use of Wood and Stone. Adhesive and nails are available and constitute a very little cost that is factored into operating costs. The table below lists the precise criteria for each product.

| Resource or Activity & (Quantity available per month) | Required per Upper Cabinets | Required per Counters Cabinets |
|---|---|---|
| Wood (4,300 board feet) | 10 board ft @ $10 = $100 | 7.5 board ft @ $10 = $75 |
| Stone (2,500 yards) | - | 10 yards @ $17.50 = $175 |
| Cut Wood (280 hours) | 30 minutes | 20 minutes |
| Cut Stone (140 hours) | - | 20 minutes |
| Sand (280 hours) | 30 minutes | 10 minutes |
| Finish (140 hours) | 20 minutes | 30 minutes |
| Assemble (700 hours) | 60 minutes | 90 minutes |

The Company's operating expenses are $75,000 per month. Based on current demand, the company can sell 300 Cabinets and 180 Counters per month. Sales prices are $300 for Cabinets and $500 for Counters.

**Required:**

1. **Determine Kitchen Company's constraint.**
2. **Determine the throughput per minute of the constrained resource for each product.**
3. **Determine the product mix needed to maximize throughput, i.e., the number of Cabinets and Counters that should be produced per month.**
4. **Determine the maximum net income per month for Kitchen Company.**
5. **Suppose Kitchen Company broke the current constraint resource. What would become the new constraint?**

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