Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The goal is to apply to a system of processes in order to determine the optimal output that maximizes revenue within the system constraints. Please
The goal is to apply to a system of processes in order to determine the optimal output that maximizes revenue within the system constraints. Please do not use excel for this example it needs to be done using theory of constraints. Case facts for an operating system: It has 9 different activities Activities 1 -3 require 10 min/unit of product Activities 4- 9 require 5 min/unit of product It has 3 resources Two of them are employees in the organization and the third resource is equipment. There is a total availability of 2400 minutes per week or 40 hrs./ week per resource. First resource is Sam - experienced operator with 10 years on the job. He's responsible for activities 1 -3. Works for 40 hours/week. Second resource is Emily - experienced operator with 15 years on the job. She's responsible for activities for 4 -6. Works for 40 hours/week. Third resource is specialized equipment, "The Machine". Responsible for activities 7-9. Works for 40 hours/week. There are 3 jobs in the mix. Each job requires a different set of activities to be performed on them to be produced. Job A Requires activities 4, 8, 9 (Resources are Emily and "The Machine") Requires minimal activities Job B Requires activities 1, 2, 3, 5, 6, 7, 8 (All resources required) Requires quite a bit of activities except 4 and 9 Job C Requires activities 2, 3, 4, 5, 6, 7, 8, 9 (All resources required) Requires all activities except 1 Weekly demands and profit margins for each job are different from one another. Job Demand (units/week) Profit Margin ($/unit) A 50 20 B 100 75 C 60 60 Question: Given this information, which product mix would maximize revenue? Analyze and provide answer an answer for each of the below scenarios. Scenario 1 - The demand in units/week is the maximum demand for each product in the week. (Cannot exceed demand) Scenario 2 - The demand in units/week is the forecasted demand for each product in a given week, you can exceed the demand. (Can exceed demand)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started