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A company makes four products: Product A sells for $50 but needs $10 of materials; Product…
A company makes four products: Product A sells for $50 but needs $10 of materials; Product B sells for $75 but needs $30 of materials; Product C sells for $100 but needs $50 of materials; Product D sells for $150 but needs $75 of materials. The labor cost is $15/hr. The processing requirements for each product on each of the four machines are shown in the table.
Table 6
| Work Center | Processing Time (min/unit) | |||
| A | B | C | D | |
| W | 3 | 5 | 7 | 8 |
| X | 7 | 4 | 4 | 11 |
| Y | 9 | 12 | 7 | 6 |
| Z | 5 | 7 | 0 | 2 |
Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week.
Use the information in Table 6. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix?
a. Less than or equal to $ 12,000
b. Greater than $12,000 but less than or equal to $ 13,000
c. Greater than $13,000 but less than or equal to $14,000
d. Greater than $14,000 but less than or equal to $15,000
e. Greater than $15,000
