Thank you in advance! advocatea by Ta 10. A\'s Wildlife Emporium manufactures tw

Question

Thank you in advance!

advocatea by Ta 10. A's Wildlife Emporium manufactures two unique birdfooders (Deluxe and Supor Diuper) hat aro manufac tured and assembl (X. Y, Z) using a small batch process. Each of is produce ac ed in up to three different workstations the producls Additionally the lowelhart indicalos oach p price. weekly Batch setup timos aro negligiblo. up to the limit of its weekly demand and thore cording to the flowchart in Figure 5-14 y demand, and processing times per unit are no ligible. A.1. can make and sell for not being able to meet alh of the domand Each workstation is to wo hour. Tho p overtime. Overhead costs aro taffed by a worker who is dedicated rk on that vvorksst ation alon e and is paid S16 per lant operates 40 hOUrs per week. wi th no er veek.Based on tion provided. as well as the information con ained in the Howchart. answor the following questions a Using the traditional method. whicls bases mothod. which basesdecisions hood what is the optimal product mix and what n a produc s contribution to proits and solely o over is tho overall profitability? b- Using the bottleneck-based method. what is the o uct mix and what is the overall profitabilit FIGURE 5.14 AJ.'s Wilde Emporium Flowchart Deluxe Product: Deluxe Step 2 et workstation Y 15 min) Finish with Step 3 at workstation X (15 min) Price: S81/unit Demand: 50 units/wk $9 at workstation Z (30 min) Raw materials S6/ Purchased part Super Duper Step 1 at workstation X (30 min) Step 2 at workstation Z (10 min) Finish with Step 3 at workstation Y (20 min) Product: Super Duper Price: $80uni Demand: 60 unitw S4 Raw materials S6 Purchased part

Explanation / Answer

Traditional Method:

Since the contribution margin of Super Duper product is more than Deluxe model, prefer to produce first Super Duper product and with remaining capacity produce Deluxe model.

First load 60 units Super Duper on all three machine and determine Capacity remaining or Miniutes left on each machine as shown below. Time left on bottleneck WS# X, number of Deluxe model that can be produced is calculated as follows:

Number = (time remaining on Bottleneck WS)/(Unit time on bottleneck WS) = 600/15 = 40 units

With remaining capacity 40 units of Deluxe can be produced.

WS #

Minutes at the start

Minutes left after making 60 SD

Minutes left after making 40 SD

X

2400

600

0

Y

2400

1200

600

Z

2400

1800

600

According to Traditional Method, produce 60 units of Super Duper and 40 units of Deluxe

Bottleneck method:

Product Mix according to Bottleneck Method:

Select the best product mix according to the dollar contribution margin per minute of processing time at the bottleneck workstation Z. This method would take advantage of the principles outlined in the theory of constraints and get the most dollar benefit from the bottleneck.

Select the best product mix according to the highest overall contribution margin of each product.

Product

Deluxe

Super Duper

Contribution margin

$66

$70

Time at bottleneck

15

30

Contribution margin per minute

$66/15

= $4.4

$70/30

= $2.33

Order of production schedule: Deluxe – Super Duper

First load 50 units of Deluxe on all three machine and determine Capacity remaining or Miniutes left on each machine as shown below. Minimum time left on bottleneck WS# X is 1650. The number of Super Duper model that can be produced is calculated as follows:

Number = (time remaining on Bottleneck WS)/(Unit time on bottleneck WS) = 1650/30 = 55 units

With remaining capacity 55 units of Super Duper can be produced.

Workstation

Minutes at the start

Minutes left after making 50 Deluxe

Minutes left after making 55 SD

X

2400

1650

0

Y

2400

1650

550

Z

2400

900

350

According to bottleneck-based Method, produce 60 units of Super Duper and 40 units of Deluxe

WS #

Minutes at the start

Minutes left after making 60 SD

Minutes left after making 40 SD

X

2400

600

0

Y

2400

1200

600

Z

2400

1800

600

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