Cooper River Glass Works? (CRGW) produces four different models of desk lamps as
ID: 421095 • Letter: C
Question
Cooper River Glass Works? (CRGW) produces four different models of desk lamps as shown on the flowchart. The operations manager knows that total monthly demand exceeds the capacity available for production.? Thus, she is interested in determining the product mix which will maximize profits. Each? model's price,? routing, processing? times, and material cost is provided in the flowchart. Demand next month is estimated to be 150 units of model? Alpha, 175 units of model? Bravo, 250 units of model? Charlie, and 200 units of model Delta. CRGW operates only one 8 hours shift per day and is scheduled to work20 days next month? (no overtime).? Further, each station requires a 10?% capacity cushion.
Part A:
Which station is the? bottleneck?
The bottleneck is Station_______ with a total load of __________minutes for the next month. ?(Enter your response as a whole? number.)
Part B.
Using the traditional? method, which bases decisions solely on a? product's contribution to profits and? overhead, what is the optimal product mix and what is the overall? profitability?
Part C.
Using the bottleneck method, which bases decisions solely on a? product's contribution to profits and? overhead, what is the optimal product mix and what is the overall? profitability?
Chrome- Do Homework -Sareya Thiefault Secure | https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkid=477259 100&questionid;=2&flushed-false;&cid;=4959249¢erwin-yes; BBUS340 Spring2018 ? Sa reya Thiefault | 6/4/18 7:33 AM Save Homework: Chapter 5 Homework HW Score: 20%, 5 of 25 pts 2 of 2 (2 complete)> Score: 0 of 20 pts estion Help X Problem I monthly s price, routing More Info Cooper River Glas demand exceeds t processing times of model Charlie each station requi l Bravo, 250 units ertime). Further, Alpha $10 tep Station tep Station tep Station tep Station Product: Alpha Price Demand: 150 units/month Click the icon in in Raw materials Bravo $10 a. Which station is The bottleneck is Product: Bravo tep Station Step Station Price: $90/unit Demand: 175 units/month in Raw materials Charlie Product: Charlie tep Station tep Station Step Station Step Station Price: $80/unit in Demand: 250 units/month in min Raw materials Delta $5 tep Station tep Station Step Station Step Station Product: Delta Price: $95/unit Demand: 200 units/month in in in in Enter vour answer Print Done heck parts remainingExplanation / Answer
Part A
Gross capacity per month of each station = 20 days per month * 8 hours per day * 60 minutes an hour = 9600 minutes
Net capacity after deducting the capacity cushion = 9600*(1-10%) = 8640 minutes
Total load of station 1 = Demand of Alpha * Step 1 time + Demand of Charlie * Step 1 time + Demand of Delta * Step 1 time = 150*10 + 250*5 + 200*20 = 6750 min
Total load of station 2 = Demand of Alpha * Step 2 time + Demand of Bravo * Step 1 time + Demand of Charlie * Step 2 time + Demand of Delta * Step 2 time = 150*5 + 175*20 + 250*15 + 200*5 = 9000 min
Total load of station 3 = Demand of Alpha * Step 3 time + Demand of Bravo * Step 2 time + Demand of Charlie * Step 3 time + Demand of Delta * Step 3 time = 150*15 + 175*10 + 250*5 + 200*10 = 7250 min
Total load of station 4 = Demand of Alpha * Step 4 time + Demand of Charlie * Step 4 time + Demand of Delta * Step 4 time = 150*10 + 250*20 + 200*10 = 8500 min
The bottleneck is Station__2__ with a total load of __9000_ _minutes for the next month. ?
Part B
Product Alpha contribution to profit and overheads = price - raw material cost = 70 - 10 = $ 60
Product Bravo contribution to profit and overheads = price - raw material cost = 90 - 10 = $ 80
Product Charlie contribution to profit and overheads = price - raw material cost = 80 - 8 = $ 72
Product Delta contribution to profit and overheads = price - raw material cost = 95 - 5 = $ 90
We see that work load of station 2 is greater than the net capacity. Therefore, products are scheduled in the order of the respective profit contribution. 200 units of Delta, 175 units of Bravo, and 250 units of Charlie will take = 200*5 + 175*20 + 250*15 = 8250 minutes. Net remaining capacity = 8640-8250 = 390 minutes
So, 390/5 = 78 units of product Alpha can be made.
Optimal product mix is: Delta = 200, Bravo = 175, Charlie = 250 and Alpha = 78
Overall profitability = 78*60 + 175*80 + 250*72 + 200*90 = $ 54,680
Part C
Using bottleneck method,
Profit contribution per minute of bottleneck capacity for product Alpha = 60/5 = $ 12 / minute
Profit contribution per minute of bottleneck capacity for product Bravo = 80/20 = $ 4 / minute
Profit contribution per minute of bottleneck capacity for product Charlie = 72/15 = $ 4.8 / minute
Profit contribution per minute of bottleneck capacity for product Delta = 90/5 = $ 18 / minute
Profit contribution per minute is highest ($ 18 per min) for product Delta.
Therefore, production of Delta should be scheduled first, then product Alpha, following by Charlie and Bravo.
Delta = 200, Alpha = 150, Charlie = 250.
Capacity used = 200*15 + 150*5 + 250*15 = 5500 minutes
Remaining capacity = 8640 - 5500 = 3140 mninutes.
Production of Bravo = 3140/20 = 157
Optimal product mix is:
Alpha = 150
Bravo = 157
Charlie = 250
Delta = 200
Overall profitability = 150*60 + 157*80 + 250*72 + 200*90 = $ 57,560