Explain principles for determining product mix, Operation Management

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

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
Related Questions
Q1. What is communication? define it in your own words Q2. Describe the characteristics of effective business communication and give examples Q3. Sould a researcher always ob

Indicate the major categories of information you would expect to find in a project review

What constitutes "operations" at (a) a bank, (b) a retail store, (c) a hospital, (d) a cable TV company

"Business-Level Strategy" Please respond to the following: • From the first e-Activity, assess your satisfaction with the company you researched and make recommendations about h

Talent Planning in Operation 1. Produce a report on the topic Talent Planning in Operation. Please ensure that you address the following issues: Describe at le

Explain limitations of budgets. Limitations of Budgets : (i) Since budget is based on calculates approximately, that is, estimated sales, estimated business conditions and

1. A manufacturing shop is designed to operate most efficiently at an output of 550 units per day. In the past month the plant produced 490 units. What was its capacity utilization

A new aircraft control system is being designed that must be 98.0% reliable. This system consists of three components in series. If all three of the components are to have the s