CKC manufactures two different types of dog chew toys

CKC manufactures two different types of dog chew toys (A and B sold 1000 count boxes) that are manufactured and assembled on three different workstations (W, X, Y) using a small batch process (see Figuare 7.9) Batch setup times are negligible. The flowchart denotes the path each product follows through the manufacturing process and each product’s price demand per week and processing times per unit are indicated as well. Purchased parts and raw materials consumed during production are represented by inverted triangles. CKC can amke and sell up to the limit of its demand per week; no penalties are incurred for not being able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alin and is paid $6 per hour. Total labor costs per week are fixed. Variable overheard costs are $3500/week. The plant operates on 8 hour shift per day, or 40 hours/week. Which of the three workstations W, X, or Y has the highest aggregate workload, and thus serves as the bottleneck for CKC?

Question 4

The senior management at Canine Kernels Company (CKC) is concerned with the existing capacity limitation, 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 for scheduling. He believes that profitability can indeed be approved if bottleneck resources are exploited to determine the 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 terms of percentage gains, by using TOC principles for determining product mix

Problem 12

A.J.’s Wildlife Emporium manufactures two unique bird-feeders (Deluxe and Super Duper) that are manufactured and assembled in up to three different workstations (X, Y, Z) using a small batch process. Each of the products is produced according to the flowchart in Figure 7.13. Additionally, the flowchart indicates each product’s price, weekly demand, and processing times per unit. Batch setup times are negligible. A.J. can make and sell up to the limit of its weekly demand and there are no penalties for not being able to meet all of the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $16 per hour. The plant operates 40 hours per week, with no overtime. Overhead costs are $2,000 per week. Based on the information pro-vided, as well as the information contained in the flowchart, answer the following questions.

a. Using the traditional method, which bases decisions solely on a product’s contribution to profits and over-head, what is the optimal product mix and what is the overall profitability?

b. Using the bottleneck-based method, what is the optimal product mix and what is the overall profitability?

Problem 16

Jane produces custom greeting cards using six distinct work elements. She would like to produce 10 cards in each 8-hour card-making session. Figure 7.15 details each work element and its associated durations in minutes as well as their precedence relationships.

a. What cycle time is required to satisfy the required output rate?

b. What is the theoretical minimum number of workstations required?

c. If Jane identifies a five-station solution, what is the associated efficiency and balance delay?

d. If the cycle time increased by 100 percent, would the theoretical minimum number of workstations also in-crease by 100 percent?