Supertronics, Inc., would like to know how the firms profitability is altered by product mix. Currently, product

Question:

Supertronics, Inc., would like to know how the firm€™s profitability is altered by product mix. Currently, product mix is determined by giving priority to the product with the highest per unit (defined as the difference between price and material cost). Details on the Supertronics product line, including processing time at each workstation, follow:

a. Assume that Supertronics has 5,500 minutes of capacity available at each workstation each week. Develop a linear program to define the production mix that maximizes contribution margin.
b. Solve your formulation using a computer package such as POM for Windows.
c. Given your solution for part (b), which machine is the bottleneck?
d. How would your formulation and solution in part (b) change if 50 units of each product were already committed to customers and thereby had to beproduced?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...