Colton Furniture Co. is a small but fast-growing manufacturer of living room furniture. Its two principal products are end tables and sofas. The flow diagram for the manufacturing at Colton follows. Colton’s manufacturing involves five processes: cutting the lumber, cutting the fabric, sanding, staining, and assembly.

One employee cuts fabric and two do the staining. These are relatively skilled workers who could be replaced only with some difficulty. Two workers cut the lumber, and two others perform the sanding operation. There is some skill to these operations, but it is less critical than for staining and fabric cutting. Assembly requires the lowest skill level and is currently done by one full-time employee and a group of part timers who provide a total of 175 hours of working time per week. The other employees work a 40-hour week, with 5 hours off for breaks, training, and personal time. Assume a four-week month and that by prior agreement, none of the employees can be switched from one task to another. The current demand for Colton’s products and sales prices are as follows, although Colton expects demand to increase significantly in the coming months if it is able to successfully negotiate an order from a motel chain.

Required

1. What is the most profitable production plan for Colton? Explain your answer with supporting calculations.

2. How would you apply the five steps of the theory of constraints to Colton’s manufacturing operations?

What would you recommend for eachstep?

Transcribed Image Text:

End Tables Sofas $250 $450 Price Current demand (units per month) 400 150 Fabric Price = $175 Lumber Lumber Price = $100 Price = $75 Cut Cut Cut and Trim 30 minutes 12 minutes 48 minutes Assemble 45 minutes Sand 30 minutes Sand Stain 30 minutes 18 minutes Stain Assemble 1.5 hours 48 minutes End Table Sofa