A customer has requested a special order for 10000

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Quick Check What is the rock bottom minimum price below which Northern Optical should not go in its negotiations with the customer? In other words, below what price would Northern Optical actually be losing money on the sale? There is ample idle capacity to fulfill the order and the imprinting machine has no further use after this order.
Key Terms and ConceptsWhen a limited resource of some type restricts the company’s ability to satisfy demand, the company is said to have a constraint.The machine or process that is limiting overall output is called the bottleneck – it is the constraint.54
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Utilization of a Constrained Resource: An ExampleEnsign Company produces two products and selected data are shown below:56Product12Selling price per unit$ 60 $ 50 Less variable expenses per unit3635Contribution margin per unit24$ 15$ Current demand per week (units)2,0002,200Contribution margin ratio40%30%Processing time requiredon machine A1 per unit1.00min.0.50min.
Utilization of a Constrained Resource: An ExampleMachine A1 is the constrained resource and is being used at 100% of its capacity. There is excess capacity on all other machines. Machine A1 has a capacity of 2,400 minutes per week.Should Ensign focus its efforts on Product 1 or Product 2?Machine A1 is the constrained resource and is being used at 100% of its capacity. There is excess capacity on all other machines. Machine A1 has a capacity of 2,400 minutes per week.Should Ensign focus its efforts on Product 1 or Product 2?57
Quick Check How many units of each product can be processed through Machine A1 in one minute?

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