Knope\'s Waffles, Inc. is currently determining its product-mix but is constrain
ID: 2465225 • Letter: K
Question
Knope's Waffles, Inc. is currently determining its product-mix but is constrained by the number of machine-hours available. Knope's products are the following waffle varieties: blueberry, whole grain and original. In order to satisfy customers, there is a minimum quantity of 10,000 units and a maximum of 50,000 units for each of the varieties. Available mac hours are 12,000 per year. Below is information for each product: Calculate the contribution margin per constraint for each product. What product-mix should be used to maximize operating income (how many units of each product should be produced)Explanation / Answer
Ranking based on CM Constraint :
Original - 1
Whole grain - 2
Blueberry = 3
Hours available after minimum production = 12000 -5500 = 6500
Minimum quantity required Hours used in minimum quantity Production hours used after minimum Total units manufactured Original 10000 1000 [10000*.1] 40000*.1 = 4000 [50000maximum-10000] 50000 [10000+40000] Whole grain 10000 2000 [10000*.2] (6500-4000) =2500/.20 = 12500 units can only be manufactured. 10000+12500 = 22500 Blue berry 10000 2500 [10000*.25] 0 10000 5500Related Questions
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