Give step-by-step solution with explanation and final answer:
To match the three styles of window frames Olde World produces
–
the Abbot, the Berkeley, and the Cheshire
–
the company also produces the same three styles of door frames. These are fabricated at four different stations
–
W
,
X
,
Y and Z
.
They utilize a batch process that is quite efficient resulting insetup times that are negligible. The process sequence below shows the prices, weekly demand, and processing times for each of the three door styles. The costs for raw materials and any parts that are purchased from outside suppliers are per
-
unit consumption rates as shown in the inverted triangles. Additional information:
•
There is no additional cost or penalty for not meeting the full demand.
•
There is one worker at each station who is paid $
2
0
/
hour and works a
4
0
-
hour week. Due to operational and staffing constraints, only one shift is operating.
•
Fixed costs for overhead are $
1
0
,
0
0
0
/
week
.
Question:
Give step-by-step solution with explanation and final answer:
To match the three styles of window frames Olde World produces
–
the Abbot, the Berkeley, and the Cheshire
–
the company also produces the same three styles of door frames. These are fabricated at four different stations
–
W
,
X
,
Y and Z
.
They utilize a batch process that is quite efficient resulting insetup times that are negligible. The process sequence below shows the prices, weekly demand, and processing times for each of the three door styles. The costs for raw materials and any parts that are purchased from outside suppliers are per
-
unit consumption rates as shown in the inverted triangles. Additional information:
•
There is no additional cost or penalty for not meeting the full demand.
•
There is one worker at each station who is paid $
2
0
/
hour and works a
4
0
-
hour week. Due to operational and staffing constraints, only one shift is operating.
•
Fixed costs for overhead are $
1
0
,
0
0
0
/
week
.
This is AI generated Response.
Asked by: pr
Created at: 2025-05-26 12:39:44
Final Answer:
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Sure! Since you haven't provided the actual process sequence, processing times, demand, and prices for each door style, I will **outline a general step-by-step solution** based on the information typically given in such problems. If you provide the missing data, I can calculate the numbers specifically for your case.
---
## General Step-by-Step Solution
### **Step 1: Gather Data**
For each door style (Abbot, Berkeley, Cheshire), you need:
- **Price per unit**
- **Raw material and purchased part costs per unit**
- **Weekly demand (units)**
- **Processing time at each station (W, X, Y, Z) per unit**
Other data:
- **Labor cost:** $20/hour
- **Labor availability:** 1 worker/station × 4 stations × 40 hours/week = 160 labor hours/week total (or 40 hours at each station)
- **Fixed overhead:** $10,000/week
---
### **Step 2: Calculate Maximum Production Capacity**
For each style, calculate how many units **can** be made per week, considering the **bottleneck** station.
For each style at each station:
\[
\text{Max units at station} = \frac{40 \text{ hours}}{\text{processing time (hours/unit)}}
\]
The **lowest** of these across all stations for each style is the **max units possible per week** for that style.
---
### **Step 3: Calculate Potential Weekly Output**
For each style:
\[
\text{Output per week} = \min(\text{max units per week from capacity}, \text{weekly demand})
\]
---
### **Step 4: Calculate Total Weekly Revenue**
\[
\text{Total Revenue} = \sum_{\text{styles}} (\text{Units produced} \times \text{Price per unit})
\]
---
### **Step 5: Calculate Total Weekly Variable Costs**
#### **A. Raw Materials & Purchased Parts:**
\[
\text{Total Materials Cost} = \sum_{\text{styles}} (\text{units produced} \times \text{material cost per unit})
\]
#### **B. Labor Cost:**
\[
\text{Total Labor Cost} = (\text{Total labor hours used}) \times \$20
\]
\[
\text{Total labor hours used} = \sum_{\text{all units at all stations}} (\text{units produced} \times \text{processing time per unit at station})
\]
But **cannot exceed 160 hours total** (or 40 hours per station).
#### **C. Overhead:**
\[
\text{Total Overhead} = \$10,000
\]
---
### **Step 6: Calculate Total Weekly Profit**
\[
\text{Profit} = \text{Total Revenue} - (\text{Total Materials Cost} + \text{Total Labor Cost} + \text{Total Overhead})
\]
---
### **Step 7: Recommendations**
If capacity < demand for any style, consider:
- Which products should be prioritized for max profit? (Calculate profit per hour of bottleneck resource for each style.)
- Is there an opportunity to increase staffing or shift work to meet more demand profitably?
---
## **Example (with hypothetical numbers):**
Let's say you have:
| Style | Price | Demand | Materials | Time W | Time X | Time Y | Time Z |
|-----------|-------|--------|-----------|--------|--------|--------|--------|
| Abbot | $200 | 50 | $50 | 0.3 | 0.2 | 0.1 | 0.1 |
| Berkeley | $250 | 60 | $70 | 0.4 | 0.3 | 0.2 | 0.2 |
| Cheshire | $300 | 40 | $80 | 0.5 | 0.4 | 0.3 | 0.3 |
#### **1. Capacity per week at each station (40 hours):**
- Abbot: min(133, 200, 400, 400) = 133 units
- Berkeley: min(100, 133, 200, 200) = 100 units
- Cheshire: min(80, 100, 133, 133) = 80 units
But demand is less than capacity for all.
#### **2. Output per week:**
- Abbot: 50 units
- Berkeley: 60 units
- Cheshire: 40 units
#### **3. Revenue:**
- Abbot: 50 × $200 = $10,000
- Berkeley: 60 × $250 = $15,000
- Cheshire: 40 × $300 = $12,000
- Total Revenue: $37,000
#### **4. Materials Cost:**
- Abbot: 50 × $50 = $2,500
- Berkeley: 60 × $70 = $4,200
- Cheshire: 40 × $80 = $3,200
- Total: $9,900
#### **5. Labor Hours Used:**
- Abbot: 50 × (0.3 + 0.2 + 0.1 + 0.1) = 35 hours
- Berkeley: 60 × (0.4 + 0.3 + 0.2 + 0.2) = 66 hours
- Cheshire: 40 × (0.5 + 0.4 + 0.3 + 0.3) = 60 hours
- Total labor hours: 35 + 66 + 60 = 161 hours (exceeds 160! Must scale back slightly)
Let’s assume we scale each down by 1 unit to fit 160 hours.
#### **6. Labor Cost:**
- 160 × $20 = $3,200
#### **7. Overhead:**
- $10,000
#### **8. Total Cost:**
- $9,900 (materials) + $3,200 (labor) + $10,000 (overhead) = $23,100
#### **9. Profit:**
- $37,000 (revenue) – $23,100 (cost) = **$13,900**
---
## **Final Answer Format**
> **The maximum weekly profit is $13,900, when producing the following units: 49 Abbot, 59 Berkeley, and 39 Cheshire (totaling 160 labor hours for the week).**
---
**PLEASE PROVIDE THE ACTUAL TABLE OF PRICES, DEMAND, MATERIAL COSTS, AND PROCESSING TIMES, and I can fill in the real numbers for your specific problem!**
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