How should manager prioritize production of three products

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Reference no: EM131931382

Problem

Nkong, Inc. produces three types of products with the following information.

                                       Product A            Product B          Product C
Unit sales price               $      100               $     200             $ 400
Unit variable cost                      60                     140                300
Unit contribution margin           40                       60               100
Machine time required                 1                        2                  4
(minutes per unit)
Monthly demand (units)        20,000                  50,000            80,000

Assume the company has only 300,000 minutes of machine time available during the month but requires 440,000 minutes to meet the demand for all three products.

A. How should the manager prioritize production of the three products?

B. Compute the number of units produced for each product.

C. The situation in this problem involved only one binding internal constraint , Write a memo to the CEO- Ms. Nkong Tankeng describing the process to identify the optimal mix of products.

Reference no: EM131931382

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