Block Corporation makes three products that use the current

Block Corporation makes three products that use the current constraint, which is a particular type of machine. Data concerning those products appear below: Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products in the order in which they should be emphasized. Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource

Solution

a.

b. Maximum amount willing to pay = Amount of contribution per unit = $14.17 per minute

	ZA	JK	DH
Selling Price per unit	325.95	543.21	511.00
Less: Variable cost per unit	251.97	420.78	397.63
Contribution per unit	73.98	122.43	113.37
Time per unit (in minutes)	4.80	8.50	8.00
Contribution per minute	15.41	14.40	14.17
Ranking	I	II	III