Question
Glocker Company makes three products in a single facility. These products have the following pricing, demand and cost structure for year 2021: Per Unit Alpha
Glocker Company makes three products in a single facility. These products have the following pricing, demand and cost structure for year 2021: Per Unit Alpha Gama Beta Selling Price $55.80 $54.60 $43.10 Variable Cost $27.90 $31.20 $21.20 Yearly Demand (units) 2,000 1,200 3,000 Fixed cost for the year is $450,000. Although the company is doing well, there is always shortage of labor. As a result, the company needs to prioritize its productions plans. The company's production team has supplied the following information. 1 unit of Alpha requires 2 hours of labor, 1 unit of Gama requires 1.5 hours of labor and 1 unit of Beta requires 0.5 hours of labor. Only 4,600 hours of labor is available every year. Glocker employs 4 workers in production, each worker works 2,000 hours per year on average. All products use the same raw material, a special organic compound. Purchase price of the organic compound is $20 per kg. Alpha requires 6 kg, Gama requires 3 kg and Beta requires 5 kg of the organic compound for each unit of production. The company can purchase only 35,000 kg per year because of shortage of raw materials. The factory has enough machines to support the production. Which input is a constraint for production of 2021? Which input is not a constraint for production of 2021? Which input may become a constraint for production of 2021?
Possible Answers (Please copy and paste the correct answer into the answer box)
1. Direct Labor
2. Raw Material
3. Machine Hour
4. Cost of Organic Compound
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