Question
The Seagate Disk-drive Company is planning annual assembly capacity for each of its three potential new products, code-named P, Q, and R. Installed assembly capacity
The Seagate Disk-drive Company is planning annual assembly capacity for each of its three potential new products, code-named P, Q, and R. Installed assembly capacity for each product is dedicated. That is, assembly capacity for a product can be used only to make that product and no other product. The total budget available for installing assembly capacity is 200,000$. For each product, the following table provides data on the unit profit margin (excluding capacity costs), the unit cost of assembly capacity, and the annual demand. [You may ignore cost data that is not specified and assume that each of the three products are profitable.] In the table below, calculate & fill in the bottleneck ratios (enter their values into the appropriate row of the above table). Use the bottleneck ratio method to prioritize products and to determine how many units of assembly capacity should be installed for each of the products so as to make good use of the available 200,000 $ budget. Calculate the resulting total annual profit.
R Product P Unit Profit Margin (Profit $/unit) Maximum Annual Demand (in 1000s of units) 24 18 42 20,000 20K 70 K 45 K Unit Assembly Capacity Cost (Budget S/unit) Bottleneck Ratio 4 6 Product Priority (1 = highest) Assembly Capacity Installed in # of units. R Product P Unit Profit Margin (Profit $/unit) Maximum Annual Demand (in 1000s of units) 24 18 42 20,000 20K 70 K 45 K Unit Assembly Capacity Cost (Budget S/unit) Bottleneck Ratio 4 6 Product Priority (1 = highest) Assembly Capacity Installed in # of unitsStep by Step Solution
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