PROBLEM 2. THEORY OF CONSTRAINTS (15%)

Lanai Outdoor Furniture (LOF) manufactures high-quality patio tables, offered in both Shorea and Teak. The demand for the tables is 900 units for the Shorea table and 1,500 for the Teak table. The tables are priced at $495 and $995 for the Shorea and Teak tables, respectively. The materials cost is $250 for the Shorea table and $430 for the Teak table. In addition, LOF has the following manufacturing information for the four manufacturing processes (preparation, assembly, finishing, and packaging/shipping), showing the amount of time (in minutes) required for each table for each process, and the total minutes of time available for each process.

	Time Required/unit			Time
Process	Shorea	Teak		Available
Preparation	25	50	100,000
Assembly	80	120	250,000
Finishing	100	250	400,000
Packaging and Shipping	60	40	120,000

What is the Throughput Margin for each of the tables?

Shorea

Teak

	Shorea	Teak
SP	$ 495.00	$ 995.00
Materials Cost	$ (250.00)	$ (430.00)
Thruput	$ 245.00	$ 565.00
Demand (in units)	900	1,500
	Shorea	Teak	Time Available
Preparation	25	50	100,000
Assembly	80	120	250,000
Finishing	100	250	400,000
Packaging and Shipping	50	50	120,000