Based on the following information and the diagram on the next page, please answer the following questions (sequentially):

1- What is the MAXIMUM Net Profit/Week that could be achieved if the system constraint were in the MARKET?

2- What is the constraint(s) of this system? Why?

3- What Net Profit/Week are you willing to commit to as being achievable for this environment? In other words, what is the realistic net profit/week if the constraint is not in the Market? Answer based on your response to #2 above.

4- What is the appropriate product mix (the mix that meets the financial objections of the firm)? Answer based on your response to #2 above.

5- Assume that your ability to compete is based on your ability to deliver a complete line of products. If you must supply a minimum of 10 units of each product to the market, what net profit/week can be expected?

6- Based on supplying a minimum of 10 units of each product to the market, how many setups can be accomplished each week on resource E? On B? On C?

7- Based on supplying a minimum of 10 units of each product to the market, how many hours of overtime are required in each resource department (A-E)? What is the total overtime cost?

8- Suppose your supplier of RM #2 agrees to provide you with an unlimited supply of RM #2 if you are willing to pay $12 per unit rather than the current $5 per unit. What NP/week could be expected if you agree to the increase?

9- If you choose to accept the price increase for RM #2 as per question #8, has the constraint shifted? If so, where is the constraint now? Explain your answer.

10- If you could choose, where would you prefer the constraint to be? Why?

Demand Selling Price: 70 units uk $35Anit 35 unitstek $40/unit 65 unitsuk $45Aunt 40 unitstuk $60/unit D 15 min B 38 min 38 min 18 min Sety 15 MM B 12 min 32 min 22 min 20 min Units RM #2 hits 12 min $5/unit 8 min 90 min Physical Layout RM #1 $5/unit Additional Information Supply Info: Resources: A, B, C, D, and E are each available for 2400 mink. Materials: RM1 - unlimited availability RM2.225 units Setup times: E: 90 minutes per setup B: 5 minutes per setup C: 3 minutes per setup Operating Expense (OE excluding RM expense): $2.500wik Overtime rate: $18.00/hr (standard rate is $12/hi) Demand Selling Price: 70 units uk $35Anit 35 unitstek $40/unit 65 unitsuk $45Aunt 40 unitstuk $60/unit D 15 min B 38 min 38 min 18 min Sety 15 MM B 12 min 32 min 22 min 20 min Units RM #2 hits 12 min $5/unit 8 min 90 min Physical Layout RM #1 $5/unit Additional Information Supply Info: Resources: A, B, C, D, and E are each available for 2400 mink. Materials: RM1 - unlimited availability RM2.225 units Setup times: E: 90 minutes per setup B: 5 minutes per setup C: 3 minutes per setup Operating Expense (OE excluding RM expense): $2.500wik Overtime rate: $18.00/hr (standard rate is $12/hi)