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17 October, 15:01

A company makes three products that have the following characteristics: Product A sells for $75 but needs $50 of materials to produce. It requires 5 minutes on the bottleneck Product B sells for $90 but needs $60 of materials to produce. It also requires 5 minutes on the bottleneck. Product C sells for $110 but needs $70 of materials to produce. It requires 10 minutes on the bottleneck. Using the traditional method, in what sequence should products be scheduled for production

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Answers (2)
  1. 17 October, 17:25
    0
    Sequence is CBA

    Explanation:

    Contribution margins:

    A = 75-50-5 = 20

    B = 90-60-5 = 25

    C = 110-70-10 = 30

    Sequence is C, B, A
  2. 17 October, 18:02
    0
    The products then should be scheduled for production in the sequence C, B, A

    Explanation:

    Acording to the details of the question Product A requires 5 minutes on the bottleneck, Product B requires 5 minutes on the bottleneck and Product C requires 10 minutes on the bottleneck.

    So the Contribution margins of each of the products can be calculated as follows:

    A = 75-50-5 = 20

    B = 90-60-5 = 25

    C = 110-70-10 = 30

    The products then should be scheduled for production in the sequence C, B, A.
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Home » Business » A company makes three products that have the following characteristics: Product A sells for $75 but needs $50 of materials to produce. It requires 5 minutes on the bottleneck Product B sells for $90 but needs $60 of materials to produce.
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