Approach to solve the problem

Determine total time needed at each

processing stage for both the products to

identify the bottleneck process.

Based on the contribution margin $($selling

price$-$component costs$-$labor cost$/$unit$)$ for

each product, determine the dollar return

per constraint minutes.

Use that information to make a decision of

best product mix.

Homework

L$.$Identify bottleneck department$($s$),$ system capacity and

department slacks.

$2.$Identify bottleneck department$($s$),$ system capacity and

department slacks.

What minimum changes, if any, must be made to various

departments in problem $2$ to make the system capacity $1500\frac{g}{m}.$

$($Hint: Work backward$)$

Case

Sound Design produces small speakers and

other audio components for use with

computers and mp $3$ players. One plant is

dedicated to two small speaker systems $($the

i$100$ and i$500$ in which an mp$3$ player can

be docked$).$ The products are similar, but

have different components and slightly

different process requirements $($depicted

next$)$

They produce to stock and know the demand as shown

in the diagrams. Assume labor cost to be $$\frac{15}{?}$ hour.

Also assume that each stage of production has $40$

hours of processing time available per week

What product mix will maximize prefit?

An engineer suggests modification to work center $C$ to

allow it to also handle tasks done by work center B if

needed. However, because of the changes, all the

activities on $"$C$"$ now take $4$ minutes $($not $2),$ and task

on $"B"$ reduces to $3$ minutes from current $4$ and $5$

minutes.

Case ${?}_{\text{c}\text{o}\text{n}\text{t}\text{u}\text{a}\text{l}\text{.}}.$

Is this a good change?

What happens to the bottleneck when the

change is made?

Any other thought about the proposed change?