Question

A company makes three products that have the following characteristics: Product A sells for $75 but needs $50 of materials to produce. It requires 5 minutes on the bottleneck Product B sells for $90 but needs $60 of materials to produce. It also requires 5 minutes on the bottleneck. Product C sells for $110 but needs $70 of materials to produce. It requires 10 minutes on the bottleneck. Using the traditional method, in what sequence should products be scheduled for production

Answer 1

Answer:

Sequence is CBA

Explanation:

Contribution margins:

A =75-50-5 = 20

B =90-60-5 =25

C =110-70-10 =30

Sequence is C,B,A

Answer 2

Answer:

The products then should be scheduled for production in the sequence C,B,A

Explanation:

Acording to the details of the question Product A requires 5 minutes on the bottleneck, Product B requires 5 minutes on the bottleneck and Product C requires 10 minutes on the bottleneck.  

So the Contribution margins of each of the products can be calculated as follows:

A =75-50-5 = 20

B =90-60-5 =25

C =110-70-10 =30

The products then should be scheduled for production in the sequence C,B,A.