I. CraftElec manufacturers three unique products (PI, P2, P3) that are fabricated and assembled at five...

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I. CraftElec manufacturers three unique products (PI, P2, P3) that are fabricated and assembled at five different workstations (WI,W2, W3,W4,W5). Each workstation is staffed by a worker who is dedicated to work a single shift per day at an assigned workstation. CraftElec can make and sell up to the limit of its demand per week and no penalties are incurred for not being able to meet all the demand. The table below provides the time taken by each product at each workstation, the selling price, raw material cost, and the maximum demand. (2 points) Product PI P2 P3 [Raw material cost/unit $10 10 45 Selling price/unit $75 72 90 Max demand/week 60 units 80 100 minutes required/unit WI 20 min 15 13 W2 8 5 10 W3 10 14 12 W4 10 10 12 W5 15 12 12 a. Suppose the product mix decision is made by first making the product with highest contribution margin, followed by the second highest contribution margin product, and so on until no more capacity is available. How many units of each product will be made and what is the resulting profit? b. Suppose the precut mix decision is made by using the contribution and the time at the bottleneck. How many units of each product will be made and what is the resulting profit? I. CraftElec manufacturers three unique products (PI, P2, P3) that are fabricated and assembled at five different workstations (WI,W2, W3,W4,W5). Each workstation is staffed by a worker who is dedicated to work a single shift per day at an assigned workstation. CraftElec can make and sell up to the limit of its demand per week and no penalties are incurred for not being able to meet all the demand. The table below provides the time taken by each product at each workstation, the selling price, raw material cost, and the maximum demand. (2 points) Product PI P2 P3 [Raw material cost/unit $10 10 45 Selling price/unit $75 72 90 Max demand/week 60 units 80 100 minutes required/unit WI 20 min 15 13 W2 8 5 10 W3 10 14 12 W4 10 10 12 W5 15 12 12 a. Suppose the product mix decision is made by first making the product with highest contribution margin, followed by the second highest contribution margin product, and so on until no more capacity is available. How many units of each product will be made and what is the resulting profit? b. Suppose the precut mix decision is made by using the contribution and the time at the bottleneck. How many units of each product will be made and what is the resulting profit?

Answer rating: 100% (QA)

Answer a To determine the product mix decision by considering the contribution margin we need to calculate the contribution margin for each product The contribution margin is calculated by subtracting ... View the full answer