Yost-Perry Industries's senior management team wants to improve the profitability of the firm by accepting the set of orders. Each workstation is staffed with one skilled worker and is paid $15 per hour. The plant operates one 8-hours shift per day and operates on a 5 days work week (ie 40 hours per person per week). Variable overhead costs are $9000/week. Currently decision are made to accept as much of the highest profit margin product as possible (up to the limits of demand, follows by the next highest profit margin 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. Which of the four workstation W, X, Y or Z serves as the bottleneck? What is the change in profit if, instead of traditional method that has used thus far, a bottleneck based approach advocated by senior management team is used for selecting the product mix?

Product A $11 Step 1 at Step 2 at Finish with Product: A Workstation W Workstation Z Step 3 at Price: $105 /unit (12 min) (12 min) Workstation X Demand: 60 (10 min) units/wk $5 Product B $11 Step 1 Step 2 at Finish with Product: B Workstation W Workstation Y Step 3 at Price: $95/unit (9 min) (15 min) Workstation Z Demand: 80 (10 min) units/wk $4 Product C $2 Step 2 at Step 3 at Finish with Product: C Workstation X Workstation W Step 3 at Price: $ 110/unit (10 min) (20 min) Workstation Y Demand: 60 (5 min) units/wk $5