Capacity constraint measured in terms of production time

Assignment Help Business Management

Reference no: EM1333180

Mega Chemical Company produces ZylexA and a related product called ZylexB. ZylexB, which sells for $15.00 per gallon, is made from a base of ZylexA plus additional ingredients. It takes 25 minutes to manufacture a gallon of ZylexA and an additional 10 minutes to manufacture a gallon of ZylexB. ZylexA sells for $9.00 per gallon. The cost per gallon of manufacturing ZylexA and the additional costs to convert it into ZylexB are:

ZylexA Additional Cost to Convert ZylexA
Into ZylexB
Material $2.00 $1.75
Labor $2.50 $0.50
Variable overhead $2.25 $1.10

Both products have been successful, and demand for both products is strong beyond the company's capacity. Since it takes additional time to manufacture ZylexB, the vice president of production is trying to determine whether ZylexB should be produced.

REQUIRED

Which product makes the largest contribution to company profit, given a capacity constraint measured in terms of production time?

Reference no: EM1333180

Questions Cloud

Find out p50 in mmhg : on the experimental data using built in Matlab function, polyfit. A

Explain what is the most important thing in doing e-commerce : Explain What is the most important thing in doing E-commerce business

Explain the methods used by latan and his colleagues : Explain the methods used and results obtained by Latan and his colleagues in their study of pseudogroups, groups, & social loafing.

Describe how important is hr to employee relations : Importance of Human Resource Dept. and Employee Relations - Explain How important is HR to employee relations? Why not just have managers run the show and outsource everything else?

Capacity constraint measured in terms of production time : Which product makes the largest contribution to company profit, given a capacity constraint measured in terms of production time?

Explain how might the international monetary system : Explain how might the international monetary system be reorganised to rely less on the US dollar.

Compute integral of n-order polynomial using simpson''s rule : The user shall be able to define that integration technique they want to use (They should also have the option to run both integration techniques in one execution)

Explain speed of internet : Explain Speed of internet and with the increasing prevalence of complex network architectures and a new crop of online consumers increasing the loads on overburdened commerce servers

Define a bad hiring decision : Human Resource/staffing managers and Hiring Decisions - How would you define a "bad hiring decision" in the private sector?

User Account

All Pages