Arya Corp produces four modes of Air Pods as follows: Air Pods standard, Air Pods Pro, Air Pods Galaxy and Air Pods Ultra. All products go through three Departments (D1, D2 and D3) but the time needed for each product at different departments varies. Data regarding the total demand for each product, the time needed for each product in each department, selling prices, fixed and variable costs for each product as well as available capacity (in terms of time) in each department (for last month) are presented as follows:

	Air Pods standard	Air Pods Pro	Air Pods Galaxy	Air Pods Ultra
Total demand per month (units)	1,200	1,200	3,500	3,200
Selling price per unit	$120	$180	$220	$300
Unit variable cost per product as % of selling price	40%	50%	55%	60%
Unit fixed cost	$30	$15	$35	$45
Time needed in Department 1 per unit (minute)	3	3	5	4
Time needed in Department 2 per unit (minute)	5	4	4	7
Time needed in Department 3 per unit (minute)	3	4	3	5

The total time available in each department for the month is 40,003 minutes. This is the same for all three departments.

Required:

1. How should Arya Corp prioritise the production of the various Air Pods products to maximise the total profit of Arya Corp? Enter your answer in the priority order of 1 to 4 for each Air Pods product to be produced. For example, 1 means this is the first product to produce and 4 means this is the last product to produce.

2. Determine the total number of each product to be produced and sold to maximise the profit of Arya Corp.

3. Assume Arya Corp wanted to fulfil total demand for at least three products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for each of the three departments? Assume that one minute of outsourced time increases the capacity of the relevant department by one minute.

4. Assume Arya Corp wanted to fulfil total demand for all products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for each of the three departments? Assume that one minute of outsourced time increases the capacity of the relevant department by one minute.

5. How much is the total contribution margin for Arya Corp if the company uses the appropriate product prioritisation given its current available capacity?

   (Total marks for the question 30 marks)

7

Question 2 continued:

Enter your answers for the following sub-questions in Part A on Canvas. Enter all your answers as numbers without the $ sign. Ensure you show the working for all sub-parts in your Part B Word document.

NO	Sub-question	Marks
17	What order of priority should Arya Corp have for Air Pods standard to maximise total profit of Arya Corp? E.g. 1 means the first product to produce and 4 means the last product to produce.	2
18	What order of priority should Arya Corp have for Air Pods Pro to maximise total profit of Arya Corp? E.g. 1 means the first product to produce and 4 means the last product to produce.	2
19	What order of priority should Arya Corp have for Air Pods Galaxy to maximise total profit of Arya Corp? E.g. 1 means the first product to produce and 4 means the last product to produce.	2
20	What order of priority should Arya Corp have for Air Pods Ultra to maximise total profit of Arya Corp? E.g. 1 means the first product to produce and 4 means the last product to produce.	2
21	How many Air Pods standard should Arya Corp produce and sell to maximise profit based on current demand and capacity?	2
22	How many Air Pods Pro should Arya Corp produce and sell to maximise profit based on current demand and capacity?	2
23	How many Air Pods Galaxy should Arya Corp produce and sell to maximise profit based on current demand and capacity?	2
24	How many Air Pods Ultra should Arya Corp produce and sell to maximise profit based on current demand and capacity?	2
25	Assume Arya Corp wanted to fulfil total demand for at least three products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 1?	2
26	Assume Arya Corp wanted to fulfil total demand for at least three products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 2?	2
27	Assume Arya Corp wanted to fulfil total demand for at least three products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 3?	2
28	Assume Arya Corp wanted to fulfil total demand for all products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 1?	2
29	Assume Arya Corp wanted to fulfil total demand for all products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 2?	2
30	Assume Arya Corp wanted to fulfil total demand for all products. What would be the maximum price that Arya Corp would pay to outsource one minute of production time for Department 3?	2
31	How much is the total contribution margin for Arya Corp if the company uses the appropriate product prioritisation given its current available capacity?	2
Total marks for the question		30