Explain principles for determining product mix, Operation Management

Assignment Help:

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.


Related Discussions:- Explain principles for determining product mix

Explain what is the resulting productivity ratio, The total output from a p...

The total output from a production system in one day is 900 units and the total labor necessary to produce the 900 units is 900 hours. Using the appropriate productivity measure, w

Calculate the non-registered investments, Calculate how much  they will be ...

Calculate how much  they will be  able  to  save  in non-registered investments each year until their retirement. This is Rose and Leonard's first look at a retirement plan. Will t

Managing organizational change, Applying models and concepts from the cours...

Applying models and concepts from the course, analyze a significant change initiative you have observed, have been affected by or have had a hand in implementing in your organizati

Assignable causes of variability for process control, 1 What advantages can...

1 What advantages can statistical process control methods provide?  2 Explain the significance of common and assignable causes of variability for process control.

Define what is the sample value of the test statistic, 1. The average laten...

1. The average lateness for one of the top airline companies is 10 minutes. The Standard Deviation of the lateness measure is calculated as 3. An airplane arrived 8.5 minutes after

Layout: Line balancing., Layout: Line balancing Kiko Teddy Bear is a manu...

Layout: Line balancing Kiko Teddy Bear is a manufacturer of stuffed teddy bears. Kiko would like to be able to produce 40 teddy bears per hour on its assembly line. The followin

Explain what are america''s and today''s workers, What are America's and to...

What are America's and today's workers view of the labor unions?

Define performance appraisals are they necessary or not, Performance Apprai...

Performance Appraisals- 1. What purpose do they serve under a performance management system? 2. Performance appraisals are they necessary or not? 3. What to do if a perfor

Define the functional department integration, Q. Define the functional depa...

Q. Define the functional department integration in information system. All functional departments are integrated within one holistic information system. Well integrating manufa

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd