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Bottleneck method of scheduling production activities

A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table.

Processing Time (min/unit)
Work Center A B C D
W 6 1 3 12
X 9 7 4 8
Y 4 5 11 9
Z 10 4 7 11

Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. Using the bottleneck method, in what sequence should products be scheduled for production? The bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.

Solution Summary

Solution makes the sequence of production by using bottleneck method.

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