Speedy Sneaker Co. produces and distributes three types sneakers/running shoes. Information for the past quarter on these three products is shown below.
a.If there is no resource constraint, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income? Show computations
b.If there is a resource constraint of limited machine hours, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income if it only has 2,000 machine hours per month? Show computations
c. If Speedy Sneaker's management feels that production should be distributed equally among all product types, compute the operating income if it is assumed that 3,000 total units can be produced, with 1/3 allotted to each product line, and then compare the operating income computed if all 3,000 units were allotted to the sneaker selected in (a).

Question

Speedy Sneaker Co. produces and distributes three types sneakers/running shoes. Information for the past quarter on these three products is shown below.  
a.If there is no resource constraint, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income? Show computations
b.If there is a resource constraint of limited machine hours, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income if it only has 2,000 machine hours per month? Show computations
c. If Speedy Sneaker's management feels that production should be distributed equally among all product types, compute the operating income if it is assumed that 3,000 total units can be produced, with 1/3 allotted to each product line, and then compare the operating income computed if all 3,000 units were allotted to the sneaker selected in (a).

Quizplus · Accepted Answer

The Answer of Speedy Sneaker Co. produces and distributes three types sneakers/running shoes. Information for the past quarter on these three products is shown below.  
a.If there is no resource constraint, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income? Show computations
b.If there is a resource constraint of limited machine hours, which type of sneaker should Speedy Sneaker manufacture to maximize its operating income if it only has 2,000 machine hours per month? Show computations
c. If Speedy Sneaker's management feels that production should be distributed equally among all product types, compute the operating income if it is assumed that 3,000 total units can be produced, with 1/3 allotted to each product line, and then compare the operating income computed if all 3,000 units were allotted to the sneaker selected in (a).