York-Perry Industries (YPI) manufactures a mix of affordable guitars (A, B, C) that are fabricated and assembled at four different processing stations (W, X, Y, Z). The operation is a batch process with small setup times that can be considered negligible. The product information (price, weekly demand, and processing times) and process sequences are shown below. Purchased parts and raw materials (shown as a per-unit consumption rate) are represented by inverted triangles. YPI is able to make and sell up to the limit of its demand per week with no penalties incurred for not meeting the full demand. Each workstation is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid

$13

per hour. The plant operates one 8-hour shift per day and operates on a 5-day work week (i.e., 40 hours of production per person per week). Overhead costs are $9,000/week.

$12$8$4$4Step 1Step 1Station WStation WStep 2Step 2Station YStation ZProduct AProduct BRaw materialsRaw materials(11 min)(8 min)(12 min)(13 min)Purchased partStep 1Product CStep 2Station XPurchased partPurchased partRaw materialsStation W$16$6(17 min)(8 min)

In the diagram, a flowchart represents the manufacturing process of products A, B, and C in different rows. From top to bottom, rows are arranged for Product A, Product B, and Product C, respectively. Each row begins with an inverted triangle containing the dollar amount for the raw materials that go into the process. An arrow that emerges from the triangle is followed to the right by a series of rectangles for each step in the process. Each rectangle contains the step number, station name where that step takes place, and duration in minutes for that step. Between steps 2 and 3, each process has a purchased part added to the flow as indicated by an inverted triangle with the dollar amount for the purchased part inside. The final step in each process is followed by an arrow to a summary process that shows the product name, price per unit, and demand in units per week for that product. For product A, a value of $12 is displayed inside the initial triangle. For Step 1, Station W is used and the step takes 11 minutes. For Step 2, Station Z is used and the step takes 13 minutes. After step 2, a purchased part costing $4 is added to the flow. For Step 3, Station X is used and the step takes 11 minutes. The final output arrow points to summary process that reads Product: A, Price: $110 per unit, and Demand: 57 units per week. For product B, a value of $8 is displayed inside the initial triangle. For Step 1, Station W is used and the step takes 8 minutes. For Step 2, Station Y is used and the step takes 12 minutes. After step 2, a purchased part costing $4 is added to the flow. For Step 3, Station Z is used and the step takes 10 minutes. The final output arrow points to summary process that reads Product: B, Price: $95 per unit, and Demand: 113 units per week. For product C, a value of $16 is displayed inside the initial triangle. For Step 1, Station X is used and the step takes 8 minutes. For Step 2, Station W is used and the step takes 17 minutes. After step 2, a purchased part costing $6 is added to the flow. For Step 3, Station Y is used and the step takes 6 minutes. The final output arrow points to summary process that reads Product: C, Price: $120 per unit, and Demand: 57 units per week.

Step 3Step 3Station XStation ZProduct: AProduct: B(11 min)(10 min)Price: $110/unitDemand: 57 units/wkDemand: 113 units/wkPrice: $95/unitStep 3Station Y(6 min)Product: CPrice: $120/unitDemand: 57 units/wk

x y graph

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 change in profits if, instead of the traditional method that YPI has used thus far, the bottleneck method advocated by Jay is used for selecting 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

$408408.

(Enter your response rounded to the nearest whole number.)

You