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A product mix!? The President of the Print Division would like to grow the business into 3 different print products using the exiting capacity indicated
A product mix!? The President of the Print Division would like to grow the business into 3 different print products using the exiting capacity indicated in Table 2. In addition to the demand forecast for 78 textbook titles next year, she sees demand for 45 new "paperback" titles next year as well as 20 "journal" titles3 The process to produce any of the 3 products is identical to that indicated in Table 1 and Figure 1, except that the unit loads (i.e., flow times) are significantly less for paperbacks and journals. The estimated unit loads for the proposed new products are given in Table 3. Contribution margins4 for each type of title a measure of unit profits and the demand for each title are summarized at the bottom of Table 3. Note that the unit loads for outsourced activities are not available at this time, so ignore them in the analysis. With the internal resources shown in Table 2, there is not enough capacity to produce all 78 45 20 = 143 titles of these three products. How many of each of the three products should you produce to maximize annual contribution margin, considering the internal process
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