week

$($

i

$.$

e

$.$

$,$

$4$

$0$

$$hours of production per person per week

$)$

$.$

$$Overhead costs are $

$9$

$,$

$0$

$0$

$0$

$$week$.$ The senior management team wants to improve the profitability of the firm by accepting the right set of orders. Currently, decisions are made using the traditional method, which is to accept as much of the product with the highest contribution margin as possible

$($

up to the limit of its demand

$)$

$,$

$$followed by the next highest contribution product, and so on until all available capacity is utilized. Because the firm cannot satisfy all the demand, the product mix must be chosen carefully. Jay Perry, the newly promoted production supervisor, is knowledgeable about the theory of constraints and the bottleneck

$-$

based method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix.

What is the profit if the traditional method is used for determining YPI's product mix?

$($

Note: When determining the product mix, if the number of units to produce is not a whole number, be sure to round down to the next whole number before proceeding with any profit calculations.

$)$

The profit using the traditional method is

$

$($

Enter your response rounded to the nearest whole number.

$)$

The profit using the bottleneck

$-$

based method is

$($

Enter your response rounded to the nearest whole number.

$)$

$

Calculate the change in profit.

By using the bottleneck

$-$

based method, profit Increase Or Decrease?

by

$

$($

Enter your response rounded to the nearest whole number.

$)$