Question: From 2 0 2 1 - 2 0 2 3 , many industries across the world faced a shortage of comp 4 particular, the auto
From many industries across the world faced a shortage of comp
particular, the auto industry faced a shortage of key chips needed to manufact
Below is hypothetical information for a car manufacturer, Niyonda. Before the chip
shortage, the Niyonda produced and sold sedans, trucks, and SUVs every
week. Each vehicle required one specialized computer chip. Now Niyonda only has access to
computer chips per week and must decide how many of each product line to produce.
Each vehicle requires chip.
The United Auto Workers UAW union has threatened a major strike if the Niyonda tries to
cut labor hours. Niyonda also cannot reduce its fixed overhead. However, materials, variable
overhead, and selling expenses are variable in the short term.
Below is a segment income statement for Niyonda for the last week before the chip
shortage began. Use the Theory of Constraints to maximize Niyonda's operating profit. The
constraining factor is the number of chips. What will Niyonda's weekly operating profit be
Assume that perunit revenue and variable costs remain the same and that total fixed costs
remain the same. Also, assume that Niyonda can sell a maximum of sedans, trucks,
and SUVs every week. Indicate an operating profit!
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