Question
The Justin Manufacturing Company produces three products A, B, and C. Justin currently has weekly demand for 25 units of A, 30 units of B,
The Justin Manufacturing Company produces three products A, B, and C. Justin currently has weekly demand for 25 units of A, 30 units of B, and 25 units of C. Unfortunately, Justin has struggled to meet weekly demand and in fact is late filling orders. Justin has hired you to help them understand why they are struggling to meet weekly demand. Currently Justin has 300 labor hours and 179 machine-hours available per week, respectively. The product information is as follows:
A | B | C | |
Unit selling price | $120 | $70 | $80 |
Variable manufacturing cost | $81 | $35 | $51 |
Variable selling & administrative cost | $5 | $5 | $5 |
machine hours per unit | 2 | 2 | 3 |
labor hours per unit | 4 | 3 | 3 |
There are no fixed selling or administrative expenses. Fixed manufacturing costs are $1,000 per week.
Required:
a. Explain why Justin is unable to meet weekly Demand.
b. Based on your answer in (a.), what option(s) does Justin have?
c. Based on existing resources, what product order should fill first? Second? Last? You must support your answer.
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