Capacity

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Cumberland Enterprises manufactures goods in two processes: Assembly and Finishing. The Empire unit, which sells for $160, includes direct materials costing $30, and has a demand of 600 per week, requires 3 hours of assembly time and 1 hour of finishing time. The Monarch unit, which sells for $250, includes direct materials costing $100, and has a demand of 400 per week, requires 3 hours of assembly time and 2 hours of finishing time. Currently, Assembly has 2,100 hours available per week, and Finishing has 800 hours available per week. Cumberland has been manufacturing 300 units of Empire and 250 units of Monarch each week. Cumberland could expand Finishing by 200 hours, which would cost an additional $3,000 per week. Determine whether Cumberland is using its production capacity wisely, and whether that capacity could or should be increased. Determine the optimum product mix given current production constraints, and given production constraints if changes are made.

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