Question
The Spartan Corp. has three products possible products that it can produce in a machine intensive production process. Capacity is constrained by the number of
The Spartan Corp. has three products possible products that it can produce in a machine intensive production process. Capacity is constrained by the number of hours the machines can run during a period and the products are so popular that all units produced will be sold. Information on each product is below:
Product A | Product B | Product C | |
Demand (quantity) | 10,000 | 4,000 | 8,000 |
Price per unit | $14.00 | $29.00 | $35.00 |
Var. Costs per unit | $5.00 | $23.00 | $20.00 |
Mach. Hrs per unit | 2.0 | 2.0 | 4.0 |
In the above scenario, if Spartans Corp has a total of 40,000 machine hours, how will it prioritize production?
First we should produce Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000 units of Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000, resulting in usage of Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000 machine hours.
Second we should produce Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000 units of Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000, resulting in usage of Product AProduct BProduct C2,0004,0005,0008,00010,00020,00040,000 machine hours
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