Homework Answers
Answer is Operation Analysis, Because It is in operations when management evaluate the availability of resources and schedule the use according to the profitability mix. Bottleneck resources are used in a way to achieve the maximum profit possible.
For instance, Final product A requires processing at 3 stages, where stage 2 is bottle neck resource and takes 50 hours for 100 units to complete. and final product B requires processing at 2 stages, where stage 2 required 25 hours for 100 units.
Profit per unt of Product A is $100, Product B is $40.
Now 50 hours of stage 2 can yield $10000 in product A and $4000 in product B.
Thus in this scenerio, Maximum resources will first be utilized for product A.
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