Problem 1 TOC Company produces two products, Y and Z that are processed in four departments, A, B, C and D.

Product Y requires three types of materials, M1, M2 and M4. Product Z requires two types of materials, M2 and M3. The company's production process is illustrated in the following graphic.

The requirements for each product are summarized in the table below. Resource Material 1 Material 2 Material 3 Material 4 Department A Department B Department C Department D Required per unit of Product Y $100 $100 $15 15 minutes 15 minutes 15 minutes 15 minutes Required per unit of Product Z $100 $100 10 minutes 30 minutes 5 minutes 5 minutes

Each department has 2,400 minutes of available time per week. The Company's operating expenses are $30,000 per week. Based on current demand, the company can sell 100 units of product Y and 50 units of
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product Z per week. Sales prices are $450 for product Y and $500 for product Z. All four materials are available in sufficient quantities. The needed workers are also available. Required: 1. 2. 3. 4. Determine the company's constraint. Determine the throughput per unit for each product. Determine the throughput per minute of the constrained resource for each product. Determine the product mix needed to maximize throughput, i.e., the number of units of Y and Z that should be produced per week. 5. Determine the maximum net income per week for TOC Company. 6. Suppose the company broke the current constraint by doubling the capacity of that resource. What would become the new constraint? Problem 2 Hart Furniture Company produces two products, End Tables and Sofas that are processed in five departments, Saw Lumber, Cut Fabric, Sand, Stain, and Assemble. End tables are produced from raw lumber. Sofas require lumber and fabric. Glue and thread are plentiful and represent a relatively insignificant cost that is included in operating expense. The specific requirements for each product are provided in the table below. Resource or Activity & (Quantity available per month) Lumber (4,300 board feet) Fabric (2,500 yards) Saw Lumber (280 hours) Cut Fabric (140 hours) Sand (280 hours) Stain (140 hours) Assemble (700 hours) Required per End Table 10 board ft @ $10 = $100 30 minutes 30 minutes 20 minutes 60 minutes Required per Sofa 7.5 board ft @ $10 = $75 10 yards @ 17.50 = $175 20 minutes 20 minutes 10 minutes 30 minutes 90 minutes

The Company's operating expenses are $75,000 per month. Based on current demand, the company can sell 300 End Tables and 180 Sofas per month. Sales prices are $300 for End Tables and $500 for Sofas. Required: 1. Determine Hart Company's constraint. 2. Determine the throughput per minute of the constrained resource for each product. 3. Determine the product mix needed to maximize throughput, i.e., the number of End Tables and Sofas that should be produced per month. 4. Determine the maximum net income per month for Hart Company. 5. Suppose Hart Company broke the current constraint resource. What would become the new constraint? 6. Solve the Hart Company product mix problem assuming that only 3,000 board feet of lumber can be obtained rather than 4,300 board feet.
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Problem 3 Buffa Company produces two products, X and Y that are processed in two departments, A and B. The requirements for each product are provided in the table below. Resource Department A Department B Required per unit of Product X 2 hours 3 hours Required per unit of Product Y 4 hours 2 hours

Weekly capacity is 80 hours for Department A and 60 hours for Department B. Throughput per unit is $60 for X and $50 for Y. Required: 1. Assume that the company can sell as much of X and Y as it can produce. Determine the number of units of X and Y that should be produced per week to maximize throughput. 2. Now assume that Weekly demand is 12 for Product X and 14 for Product Y. What would be the new product mix needed to maximize throughput?