Catawba Industrial Company
As the financial consultants of Catawba Industrial Company our aim is to determine the best course of action to pursue with respect to the introduction of the new proposed light weight compressor. This course of action must remain within the production capacity restrictions the company faces.
The company will continue to produce the standard compressor to satisfy the requirements for the automatic paint system and the demand that currently exists for this product.
Introduce Light Weight Compressor: The company will introduce the new light weight compressor to replace the standard unit in the automatic paint system and to satisfy any demand that might exist through industrial distributors.
Mixed …show more content…
Product Mix #4 Equation Capacity
1)10 Standard Compressors
2) Light Weight Compressors
10 units ×100 hours
2400 hours-1000 hours
(1400 hours)/(62.5 hours)
=22.4units The total capacity for producing light weight compressors when assuming the production of 10 standard compressors produced each week were required as a component for the automatic paint systems sold by the company is 22.4 units.
Explanation: In order to determine the capacity for light weight compressors when assuming that 10 standard compressors are used as a component for the company, we would determine the total