High Point Furniture manufactures a high-quality dining table, which is offered in both oak and walnut. The

Question:

High Point Furniture manufactures a high-quality dining table, which is offered in both oak and walnut. The demand for the tables is 800 units for the Oak Table and 1,500 for the Walnut Table. High Point does not expect demand for either product to be greater than the 800 Oak Tables or the 1,500 Walnut Tables.

The sales price for the Oak Table is $495 and the Walnut Table is priced at $995. The materials cost is $210 for the Oak Table and $430 for the Walnut Table. The following manufacturing information is for High Point's four manufacturing processes: receiving, preparation, assembly, and finishing. The table shows the amount of time (in minutes) needed to complete each step in the manufacturing process for each table product. The last column shows High Point's total time available for each process or the available capacity for each step of the manufacturing process.

Process Step Time Needed

Oak Table

/ Unit (minutes) Capacity:

Total Time

Walnut Table Available

Receiving 25 50 100,000

Preparation 80 120 250,000

Assembly 100 250 400,000

Finishing 60 40 120,000

Required: Complete each of the following questions. Clearly show supporting calculations for each answer.

1. Given the demand for 800 Oak Tables, what is the manufacturing time per processing step and in total to manufacture 800 Oak Tables?

2. Given the demand for 1,500 Walnut Tables, what is the manufacturing time per processing step and in total to manufacture 1,500 Walnut Tables?

3. What manufacturing step is a constraint for the current demand?

4. Calculate the throughput margin for the a) Oak Tables and b) Walnut Tables.

5. Given the constraint identified in step 3. which product is more profitable to produce?

6. With the maximum demand of 800 Oak Tables and 1,500 Walnut Tables and High Point's Capacity constraint (Total Time Available), what is the best production/sales mix for the two types of tables