YPI manufactures a mix of affordable guitars (A, B, C) that are fabricated and assembled at four different processing stations (W, X, Y, Z). The operation is a batch process with small setup times that can be considered negligible. The product information (price, weekly demand, and processing times) and process sequences are shown in Figure. Raw materials and purchased parts (shown as a per-unit consumption rate) are represented by inverted triangles. YPI is able to make and sell up to the limit of its demand per week with no penalties incurred for not meeting the full demand. Each workstation is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid $15 per hour. The plant operates one 8-hour shift per day and operates on a 5-day week (i.e., 40 hours

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YPI manufactures a mix of affordable guitars (A, B, C) that are fabricated and assembled at four
different processing stations (W,X, Y, Z). The operation is a batch process with small setup times that
can be considered negligible. The product information (price, weekly demand, and processing times)
and process sequences are shown in Figure. Raw materials and purchased parts (shown as a per-unit
consumption rate) are represented by inverted triangles. YPI is able to make and sell up to the limit
of its demand per week with no penalties incurred for not meeting the full demand. Each workstation
is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid
$15 per hour. The plant operates one 8-hour shift per day and operates on a 5-day week (i.e., 40 hours
of production per person per week). Overhead costs are $9,000/week. Which of the four
workstations, W, X, Y, or z, has the highest aggregate workload, and thus serves as the bottleneck for
YPI?
Product A
$11
Raw materials
Product B
$8
Raw materials
Product C
$14
Raw materials
Step 1
at workstation W
(12 min)
Step 1
at workstation W
(9 min)
Step 1
at workstation X
(10 min)
Step 2
at workstation Z
(12 min)
Step 2
at workstation Y
(15 min)
Step 2
at workstation W
(20 min)
$5
Finish with Step 3
at workstation X
(10 min)
$5
Purchased part
Finish with Step 3
at workstation Z
(10 min)
$4 Purchased part
Finish with Step 3
at workstation Y
(5 min)
Purchased part
Product: A
Price: $105/unit
Demand: 60 units/wk
Product: B
Price: $95/unit
Demand: 80 units/wk
Product: C
Price:
$110/unit
Demand: 60 units/wk
Transcribed Image Text:YPI manufactures a mix of affordable guitars (A, B, C) that are fabricated and assembled at four different processing stations (W,X, Y, Z). The operation is a batch process with small setup times that can be considered negligible. The product information (price, weekly demand, and processing times) and process sequences are shown in Figure. Raw materials and purchased parts (shown as a per-unit consumption rate) are represented by inverted triangles. YPI is able to make and sell up to the limit of its demand per week with no penalties incurred for not meeting the full demand. Each workstation is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid $15 per hour. The plant operates one 8-hour shift per day and operates on a 5-day week (i.e., 40 hours of production per person per week). Overhead costs are $9,000/week. Which of the four workstations, W, X, Y, or z, has the highest aggregate workload, and thus serves as the bottleneck for YPI? Product A $11 Raw materials Product B $8 Raw materials Product C $14 Raw materials Step 1 at workstation W (12 min) Step 1 at workstation W (9 min) Step 1 at workstation X (10 min) Step 2 at workstation Z (12 min) Step 2 at workstation Y (15 min) Step 2 at workstation W (20 min) $5 Finish with Step 3 at workstation X (10 min) $5 Purchased part Finish with Step 3 at workstation Z (10 min) $4 Purchased part Finish with Step 3 at workstation Y (5 min) Purchased part Product: A Price: $105/unit Demand: 60 units/wk Product: B Price: $95/unit Demand: 80 units/wk Product: C Price: $110/unit Demand: 60 units/wk
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