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Hi Sir
i have a concern regarding bottleneck in TP
If labour time required for two products in two departments are as followsDept A : Product A : 10 minutes Product B : 20 minutes
Dept B : Product A : 15 minutes Product B : 20 minutesDep A has 600 mins available per day and Dep B has 930 minutes available.
Maximum demand daily A : 50 and B is 25Here to identify bottleneck is it right to do like this ?
To fulfill maximum demand
Dept A requires 500 + 500 = 1000 hours
Dept B requires 750 + 500 = 1250 hoursFrom this how to get to bottleneck ?
Here if i compare required hours with available both of them seems as bottleneck but answer says otherwise
We obviously do not know how many of each product they actually end up producing because we do not have more information.
However at the extremes, if they were to only produce Product A then Department A could produce 600/10 = 60 units whereas Department B could produce 930/15 = 62 units. So in this case Department A would be the bottleneck.
If, on the other hand, they were to only produce Product B, then Department A could produce 600/20 = 30 units whereas Department B could produce 930/20 = 46.5 units. So again Department A would be the bottleneck.
Therefore whatever ends up happening, it is Department A that is the bottleneck.
I got this. But in Sep 16 exam , 11th question its pretty much the same detail. There if i have to identify which is bottleneck we compare hours required with hours available and decide that process 2 is bottleneck.
I was wondering why we cant apply that here ?
Can you kindly help me with this statement as well :Work in progress should be valued at material cost that no value will be added to profit until the sale takes place.
i know the assumption that material is only variable. but rest of the statement i cant understand
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