Question: In the table below, calculate the bottleneck ratios. Use the bottleneck ratio method to prioritize products and to determine how many units of assembly capacity

In the table below, calculate the bottleneck ratios. Use the bottleneck ratio method to prioritize products and to determine how many units of assembly capacity should be installed for each of the products to make good use of the available 200,000 $ budget. Then, calculate the resulting total annual profit.

Product P Q R
Unit Profit Margin (Profit $/unit) 24 18 42
Maximum Annual Demand (in 1000s of units) 20,000 = 20K 70 K 45 K
Unit Assembly Capacity Cost (Budget $/unit) 4 2 6
Bottleneck Ratio
Product Priority (1 = highest)
Assembly Capacity Installed in # of units.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!