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Determine product mix decisions

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Reference no: EM132540264

Extension Exercise - Product Mix Decisions

A manufacturer has a choice of making three products, Alpha, Beta or Delta. Due to a temporary constraint of available machine hours (MHs) in the plant due to maintenance, only 1240 Machine Hours will be available per week for the next few months. The manager has asked if there is any way they can maximize returns to the company (CONTRIBUTION MARGIN - CM) by limiting which units to produce during this time. Known/regular demand for the Alpha, Beta and Delta products are 100, 200 and 100 respectively.

Required:

Question 1: Utilise your knowledge of product mix to maximize CM by working out which products to make in order of priority.

Reference no: EM132540264

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