22) Bods Grill Inc. manufactures two types of grills, Deluxe and Super Duper, th

Question

22) Bods Grill Inc. manufactures two types of grills, Deluxe and Super Duper, that are assembled in 3 workstations. Setup times are neglegible and capacity cushion is maintaned at 10%. Each workstation is staffed by a worker and paid $16 per hour. The plant operates 40 hours a week with overhead costs of $2,000 per week. a. Which of the three workstations X, Y, or Z serves as the bottleneck for Bod Grill Inc.? b. Calculate () the optimal product mix quantity and (i) the profitability using.only bottleneck method. Deluxe Step 1 at Workstation Z (30 min) Step 2 a Werkstat:00 Y (15 ms) Finish with Step3 at workstatsceX (1S min) Prodsct: Delune price, $73 / mint Demand: 50 uruswk. S9 Raw Materials Purchased Part Super Duper Prodnct: Super Duper Price: $80 unit Demand: 60 ts wk Step 2 at Finish with Step Step 1 at workstaticax (30 min) at workstation (20 min) workstation Z- (10 min) Raw Materials 56 Purchased Par

Explanation / Answer

(a)

Workload on workstation X = 15 minutes * 50 units/wk of Deluxe + 30 minutes * 60 units/wk of Super Deluxe

= 2550 hours

Workload on workstation Y = 15 minutes * 50 units/wk of Deluxe + 20 minutes * 60 units/wk of Super Deluxe

= 1950 hours

Workload on workstation Z = 30 minutes * 50 units/wk of Deluxe + 10 minutes * 60 units/wk of Super Deluxe

= 2100 hours

Available time = 40 hours = 2400 minutes/wk

Workload on workstation X exceeds the available capacity. Therefore, X is the bottleneck.

(b) Using bottleneck method

(i) Deluxe unit profit = 75-9-6-16*(30+15+15)/60 = 44, profit per minute on X = 44/15 = 2.93

Super Deluxe unit profit = 80-4-6-16*(30+10+20)/60 = 54, profit per minutes on X = 54/30 = 1.8

Profit per minute on workstation X of Deluxe is higher. Therefore, it is prioritized.

So, 50 units of Deluxe should be produced. Remaining capacity on workstation X = 2400 minutes - 15*50 = 1650 minutes

Production of Super Deluxe = 1650 / 30 = 55 units.

Optimal product mix is :

Deluxe = 50 units/wk

Super Deluxe: 55 units/wk

(ii) The profitability = 2.93*50+1.8*55 = $ 245.5

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.