Question
Drum-Buffer-Rope Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $400 and $600, respectively. The components pass
Drum-Buffer-Rope Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $400 and $600, respectively. The components pass through three sequential processes: cutting, welding, and assembly. Data pertaining to these processes and market demand are given below (weekly data). Fisher Company has three sequential processes: cutting, welding, and assembly. Assume that the optimal mix is Component A = 0 units per week; and Component B = 30 units per week. Demand is uniformly spread out over the five-day work week. Fisher requires a 2.5-day buffer. Required: 1. Identify the following: The drummer. The rate of production. per day The time buffer. Round your answer to one decimal place. day The rope. units of 2 What if the Welding Department was allowed or encouraged to produce at capacity? What effect will this have on work-in-process inventories? .
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