Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold in 1,000-count boxes) that are manufactured and assembled on threedifferent workstations (W, X, and Y) using a small-batch process (see the figure below). Batch setup times are negligible. The flowchart denotes the path each productfollows through the manufacturing process, and each product's price, demand per week, and processing times per unit are indicated as well. Purchased parts and rawmaterials consumed during production are represented by inverted triangles. CKC can make and sell up to the limit of its demand per week; no penalties are incurred for notbeing able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $10 per hour. Total labor costs perweek are fixed. Variable overhead costs are $3,500/week. The plant operates one 8-hour shift per day, or 40 hours/week.Product A$4Raw materialsProduct B$7Raw materialsStep 1Station W(10 min)Step 1Station X(20 min)Step 2Station X(10 min)$3Purchased partStep 2Station W(12 min)$8Purchased partStep 3Station(13 min)Step 3Station Y(11 min)Product: APrice: $60/unitDemand: 90 units/wkProduct: BPrice: $75/unitDemand: 100 units/wkThe senior management is concerned with the existing capacity limitation, so they want to accept the mix of orders that maximizes the company's profit. Traditionally, CKChas utilized a method whereby decisions are made to produce as much of the product with the highest contribution margin as possible (up to the limit of its demand),followed by the next highest contribution product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial.Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method for scheduling. He believes thatprofitability can indeed be improved if bottleneck resources are exploited to determine the product mix.a. What is the profit if the traditional contribution margin method is used for determining CKC's product mix?The profit with the traditional approach is $ 3,420. (Enter your response rounded to the nearest whole number.)b. What is the profit if the bottleneck method is used for determining CKC's product mix?The profit with the new bottleneck approach is $ 4,570. (Enter your response rounded to the nearest whole number.)c. Calculate the profit gain, both in absolute dollars as well as in terms of percentage gains, by using TOC principles for determining product mix.Profit increases by $1,150 (enter your response as an integer), which is a percentage gain of 33.63 % (enter your response as a percent rounded to two decimal places).

Answer) Please construct a table as shown below using the data given in the problem.ProductCost of…

Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold in 1,000-count boxes) that are manufactured and assembled on three different workstations (W, X, and Y) using a small-batch process (see the figure below). Batch setup times are negligible. The flowchart denotes the path each product follows through the manufacturing process, and each product's price, demand per week, and processing times per unit are indicated as well. Purchased parts and raw materials consumed during production are represented by inverted triangles. CKC can make and sell up to the limit of its demand per week; no penalties are incurred for not being able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $10 per hour. Total labor costs per week are fixed. Variable overhead costs are $3,500/week. The plant operates one 8-hour shift per day, or 40 hours/week. Q Q Product A $4 Raw materials Product B $7 Raw materials Step 1 Station W (10 min) Step 1 Station X (20 min) Step 2 Station X (10 min) Purchased part Step 2 Station $3 (12 min) $8, Purchased partV Step 3 Station Y (13 min) Step 3 Station Y (11 min) Product: A Price: Demand: 90 units/wk $60/unit Product: B Price: $75/unit Demand: 100 units/wk

Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold in 1,000-count boxes) that are manufactured and assembled on three different workstations (W, X, and Y) using a small-batch process (see the figure below). Batch setup times are negligible. The flowchart denotes the path each product follows through the manufacturing process, and each product's price, demand per week, and processing times per unit are indicated as well. Purchased parts and raw materials consumed during production are represented by inverted triangles. CKC can make and sell up to the limit of its demand per week; no penalties are incurred for not being able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $10 per hour. Total labor costs per week are fixed. Variable overhead costs are $3,500/week. The plant operates one 8-hour shift per day, or 40 hours/week. Q Q Product A $4 Raw materials Product B $7 Raw materials Step 1 Station W (10 min) Step 1 Station X (20 min) Step 2 Station X (10 min) Purchased part Step 2 Station $3 (12 min) $8, Purchased partV Step 3 Station Y (13 min) Step 3 Station Y (11 min) Product: A Price: Demand: 90 units/wk $60/unit Product: B Price: $75/unit Demand: 100 units/wk

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter12: Queueing Models

Section: Chapter Questions

Problem 59P

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