The senior management at Canine Kernels Company CKC is concerned with the existing capacity limitations so they want to accept the mix of orders that maximizes the company's profits. Traditionally, CKC has utilized a method whereby decisions are made to produce 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 margin product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial. Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method of scheduling. He believes that profitability can indeed be approved if bottleneck resources are exploited to determine product mix.

A, What is the profit if the traditional contribution margin method is used for determining CKC's product mix?

B. What is the profit if the bottleneck method advocated by Troy is used for selecting the product mix?

C. Calculate the profit gain, both in absolute dollars as well as in absolute dikkars as well as in terms of percentages gains, by tying TOC principles for determining product mix.

Posted Date: 2/26/2014 12:30:20 AM | Location : United States

Ask an Expert

Related Discussions:- Explain principles for determining product mix, Assignment Help, Ask Question on Explain principles for determining product mix, Get Answer, Expert's Help, Explain principles for determining product mix Discussions

Write discussion on Explain principles for determining product mix
Your posts are moderated

Write your message here..

Related Questions

Characteristics of job order production, Characteristics of job order Produ... Characteristics of job order Production Small Production Runs: Job order production is characterized by the manufacturing of one or few numbers of single product designe

What is the capacity represented by dso, What is the capacity represented b... What is the capacity represented by "DSO"? a. 56Kbps b. 64 Kbps c. 255 Kbps d. 768 Kbps

Make a product structure for heather, Operations Mgmt. 10th edition Hiezer/... Operations Mgmt. 10th edition Hiezer/Render Heather Adams, production manager for a Colorado exercise equipment manufacturer, needs to schedule an order for 50 UltimaSteppers, whic

Describe the term orginizational culture, Define the term orginizational cu... Define the term orginizational culture. How might this company information enhance a sales presentation?

Give examples of quantitative data analysis technique, Provide an example o... Provide an example of a situation when you would use a quantitative data analysis technique. Provide and example of a situation when you would provide a qualitative data analysi

Explain sources of manpower recruitment, Explain Sources of Manpower Recrui... Explain Sources of Manpower Recruitment. Sources of Manpower Recruitment:  (i) From in the Company The sources of manpower recruitment for any company are as following

What are the assumptions of economic order quantity, What are the assumptio... What are the assumptions of Economic Order Quantity? Assumptions of Economic Order Quantity (EOQ): a. The stage of customer demand is identified b. The stage of customer

Explain purchase the motors for the appliance, A firm plans to begin produc... A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7 each or to produce them in-

Explain quality is considered to be a structural element, Quality is consid... Quality is considered to be a structural element of the strategic service concept.

Explain attempt to change an organizations culture, How would an OD (organi... How would an OD (organizational practitioner) attempt to change an organizations culture?