The constraint at Trek Inc. is an expensive milling machine. The three products listed below use this constrained resource.
$\begin{array}{lrrr}
&\text {9p}&\text {8l}&\text {7n}\
\text { Selling price per unit } & \$ 404.58 & \$ 478.74 & \$ 358.44 \
\text { Variable cost per unit } & \$ 308.88 & \$ 371.30 & \$ 285.36 \
\text { Time on the constraint (minutes) } & 6.60 & 7.90& 5.80
\end{array}$
Required:
a. Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products in the order in which they should be emphasized. Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

Question

The constraint at Trek Inc. is an expensive milling machine. The three products listed below use this constrained resource.
 $\begin{array}{lrrr}
&\text {9p}&\text {8l}&\text {7n}\ 
\text { Selling price per unit } & \$ 404.58 & \$ 478.74 & \$ 358.44 \
\text { Variable cost per unit } & \$ 308.88 & \$ 371.30 & \$ 285.36 \
\text { Time on the constraint (minutes) } & 6.60 & 7.90& 5.80
\end{array}$ 
Required:
a. Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products in the order in which they should be emphasized. Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

Quizplus · Accepted Answer

The Answer of The constraint at Trek Inc. is an expensive milling machine. The three products listed below use this constrained resource.
 $\begin{array}{lrrr}
&\text {9p}&\text {8l}&\text {7n}\ 
\text { Selling price per unit } & \$ 404.58 & \$ 478.74 & \$ 358.44 \
\text { Variable cost per unit } & \$ 308.88 & \$ 371.30 & \$ 285.36 \
\text { Time on the constraint (minutes) } & 6.60 & 7.90& 5.80
\end{array}$ 
Required:
a. Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products in the order in which they should be emphasized. Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

The Constraint at Trek Inc Required: A

The Constraint at Trek Inc Required:
A