If process capacity is about equal to the theoretical capacity in question # 3, the key to increasing capacity is to increase the theoretical capacity of the process. This requires increasing the resource levels of each bottleneck resource pool. Which one of the following is NOT relevant as a lever to improve the theoretical capacity at an online retailer?

*Speed up the packing activity by use of automated packaging system.

*Increase the number of order packing specialists.

*Increase operating time at packing station with a night shift.

*Reduce procurement lead time by selecting suppliers certified with ISO 9000.

A company makes two products A and B, using a CNC milling machine(s) which is classified as a single resource pool. The resource is available for 900 minutes per day. The contribution margins for A and B are $20 and $35 per unit respectively. The unit loads are 10 and 20 minutes per unit.

Which product is more profitable?

*product A

*product B

*The same

*cannot be determined with given set of data

A company makes two products A and B, using a CNC milling machine which is classified as a single resource pool. The resource is available for 900 minutes per day. The contribution margins for product A and B are $20 and $35 per unit respectively. The unit loads are 10 and 20 minutes per unit.

The company wishes to produce a mix of 60% As and 40% Bs. What is the effective capacity (units per day)?

*The unit load of the mix is 60%*20 +40%*10 = 16 minutes per unit. The capacity is 900/16 = 56.3 units per day

*The unit load of the mix is 60%*20 +40%*35 = 26 minutes per unit. The capacity is 900/26 = 34.6 units per day

*The unit load of the mix is 60%*10 +40%*20 = 14 minutes per unit. The capacity is 900/14 = 64.3 units per day

*The unit load of the mix is 60%*35 +40%*20 = 29 minutes per unit. The capacity is 900/29 = 31.0 units per day