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2) Consider the data provided below for three products Product Selling Unit direct Unit Unit Unit Unit price material direct outsourcing overhead processing labor cost
2) Consider the data provided below for three products Product Selling Unit direct Unit Unit Unit Unit price material direct outsourcing overhead processing labor cost (S) time at the bottleneck (hrs 125 250 200 25 100 110 35 35 35 25 25 25 12 2.5 12 There is 600 total available machine-hours on the bottleneck machine. The sales department estimates the maximum sales for each product to be as follows: A : maximum 70 B:maximum 120 C:maximum 220 a) What is the unit profit of each product in the sense of classical cost accounting? Show work. b) What is the contribution margin of each product in the TOC sense? Show work c) What is the best product mix that will maximize the throughput (in the TOC sense)? Show work. d) Write down the corresponding LP problem, when solved will give the optimal product mix
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