Chapter 7 Constraint Management

Table 7.6

Burdell Industries makes four different models of computer printers: the E-1000, the S-2000, the P-2000 and the N-1000. The E-1000 sells for $200 and has $40 in parts and $40 in labor; the S-2000 sells for $150 and requires $30 in parts and $30 in labor; the P-2000 sells for $100 and has $20 in parts and $20 in labor; and the N-1000 sells for $75 but requires only $10 of parts and $10 of labor. Fixed overhead is estimated at $5,000 per week. The manufacture of each printer requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 80 E-1000s; 65 S-2000s; 35 P-2000s; and 20 N-1000s.

In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck methodrefers to maximizing the contribution margin per minute at the bottleneck for each product.

64) Use the information in Table 7.6. Which machine is the bottleneck operation?

A) Machine 1

B) Machine 2

C) Machine 3

D) Machine 4

65) Use the information in Table 7.6. Using the traditional method, which product should be scheduled first?

A) Product E

B) Product S

C) Product P

D) Product N

66) Use the information in Table 7.6. Using the traditional method, in what sequence should products be scheduled for production?

A) N, S, E, P

B) N, E, P, S

C) P, E, N, S

D) E, S, P, N

67) Use the information in Table 7.6. Using the traditional method, what is the optimal product mix?

A) 120 E, 90 S, 60 P, 55 N

B) 60 E, 20 S, 50 P, 33 N

C) 80 E, 65 S, 35 P, 5 N

D) 80 E, 65 S, 20 P, 35 N

68) Use the information in Table 7.6. Using the traditional method, what is the profit if Burdell manufactures the optimal product mix?

A) less than or equal to $10,000

B) greater than $10,000 but less than or equal to $13,000

C) greater than $13,000 but less than or equal to $16,000

D) greater than $16,000

69) Use the information in Table 7.6. Using the bottleneck method, which product should be scheduled first?

A) Product E

B) Product S

C) Product P

D) Product N

70) Use the information in Table 7.6. Using the bottleneck method, in what sequence should products be scheduled for production?

A) N, S, E, P

B) N, E, P, S

C) P, E, N, S

D) E, S, P, N

71) Use the information in Table 7.6. Using the bottleneck method, what is the optimal product mix?

A) 80 E, 65 S, 35 P, 20 N

B) 60 E, 20 S, 50 P, 33 N

C) 120 E, 90 S, 60 P, 55 N

D) 80 E, 65 S, 30 P, 20 N

72) Use the information in Table 7.6. Using the bottleneck method, what is the profit if Burdell manufactures the optimal product mix?

A) less than or equal to $10,000

B) greater than $10,000 but less than or equal to $13,000

C) greater than $13,000 but less than or equal to $16,000

D) greater than $16,000

Table 7.7

A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce; Product B sells for $90 but needs $45 of materials and $20 of labor to produce; Product C sells for $110 but needs $50 of materials and $30 of labor to produce; Product D sells for $135 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table.

Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck methodrefers to maximizing the contribution margin per minute at the bottleneck for each product.

73) Use the information in Table 7.7. Which work center is the bottleneck operation?

A) Work Center W

B) Work Center X

C) Work Center Y

D) Work Center Z