PQ Problem: Consider the 3-product (X,Y,Z), 5-station (A-E). https://mailuc-my.s
ID: 3010710 • Letter: P
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PQ Problem: Consider the 3-product (X,Y,Z), 5-station (A-E).
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Product Y is sold at $100/unit and its weekly demand is 75 units per week. Product Z is sold $70 per unit and its weekly demand is 100 per week. Product X is sold 90$/unit and its weekly demand is 50 units. Product X manufacturing is started by processing two RM2 units in station A with ten minutes for each unit. One of them goes to station C and is processed for 15 minutes while the other one goes to station D for 15 minutes processing. Then, those materials are joined to each other in addition to an RM1 unit and are processed in station D for five minutes. Similar flows exist for Products Y and Z, which share some common components. For instance, a unit of the RM2 à A à D subassembly component of Product X can also be sent to station E for 10 minutes to be combined with another subassembly component to make Product Y.Suppose there are 40 hours = 2400 minutes are available on each station A thru’ E. Assume that all employees are salaried and wekly labor costs are fixed, charged at the rate of 10$/hour/station, and do not depend on the production quantities or labor utilization. Answer the following
In the table below, calculate & fill in appropriate information such as the bottleneck ratios (enter their values into the appropriate row of the table). Use the bottleneck ratio method to prioritize products and to determine how many units of products X, Y, and Z should be produced each week. Calculate the resulting total weekly profit.
Bottleneck Station is _____________; It’s max weekly workload is _______________________ minutes.
Product
X
Y
Z
Unit Profit Margin (Gross Profit $/unit)
Bottleneck Ratio
Product Priority (1 = highest)
Maximum Weekly Demand
Production Quantity
Total Weekly Profit (after incorporating weekly labor cost):
ii. By how much can the unit profit of Z decrease before your priorities (in part i above) change?
Product
X
Y
Z
Unit Profit Margin (Gross Profit $/unit)
Bottleneck Ratio
Product Priority (1 = highest)
Maximum Weekly Demand
Production Quantity
Explanation / Answer
Answer:
Production of X is started with two units of RM2 processed at station A for 10 minutes each. One of them is taken to station C for 15 minutes of processing while the other is taken to station D also for 15 minutes. These materials are then joined, along with a new unit of RM1, at station E, in a 5 minute process. Hence X has $40 of material cost.
Production of Y is started with a unit of RM2 processed at station A for 10 minutes, and a unit of RM3 processed at station B also for 10 minutes. After station A is finished, the resulting material flows to station D for 15 minutes and then to station E for an additional 10 minutes. After station B processes RM3, the resulting material is taken to stations C (5 minutes), D (10 minutes), and finally it is joined with the material resulting originally from RM2, in station E, in a 10 minute process. Material costs for Y equal $30.
Product Z is made out of one unit of RM3 and one unit of RM4. RM3 is initially processed at B for 10 minutes, then followed by 5 minutes at C, 10 minutes at D, and 5 minutes at E, where it will be joined with the unit of RM4 processed for 5 minutes at A. The material costs for Z are $25.
Product x Product y Product z Selling price $90 $100 $70 Raw material $40 $30 $25 Unit $50 $70 $45 Totals Production 0 75 52 127 Product $0 $5.250 $2.340 $7.590 Operating Expense $8000 Plant profit -$410 Mins of D per unit 15 25 10 Minutes of D per product 0 1875 520 2395Related Questions
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