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High Point Furniture manufactures a high-quality dining table, which is offered in both oak and...

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Accounting

High Point Furniture manufactures a high-quality dining table, which is offered in both oak and walnut. The demand for the tables is 800 units for the oak table and 1500 for the walnut table. The tables are priced at $495 and $995 for the oak and walnut tables, respectively. The materials cost is $210 for the oak table and $430 for the walnut table. In addition, High Point has the following manufacturing information for the four manufacturing processes (receiving, preparation, assembly, and finishing), showing the amount of time (in minutes) required for each table for each process, and the total minutes of time available for each process.

Time Required/unit Time
Name Oak Walnut Available
Receiving 25 50 100,000
Preparation 80 120 250,000
Assembly 100 250 400,000
Finishing 60 40 120,000

Required:

1. Which process(es), if any, are constraints for the current level of demand?

2. Determine through-put margin for the constrained resource.

3. Compute throughput margin per constrained resource.

4. Prioritize productive capacity based upon how many oak or walnut tables can be manufactured.

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