ABSTRACT
Throughput Pricing Let’s start with a slightly more complicated version of the example from the last chapter.29 The company diagrammed in Figure 18-1 sells two general types of projects: widgets and gizmos. Data are laid out in the boxes as before. As you can see, widgets are produced in the same way as the projects in Figure 17-1; gizmos require the same resources, in different quantities. The yearly market demand is known precisely, eight of each product. The selling price of widget projects is $50,000 apiece; gizmos are $40,000 apiece. There are 50 working weeks in a year, and yearly operating expenses are $400,000. There is no problem obtaining purchased parts; plenty are available, of good quality, exactly when needed. All the data are available and extremely accurate. There are no disruptions: no sick workers, machine breakdowns, or
walkouts. In fact, there’s no variability at all. In order that you don’t have to schedule each project, we’ll also assume that there is already work in the system; projects were being produced at the same rate last year. You have all the data. You are encouraged to treat this as a quiz, and without reading ahead answer the question: what is the maximum profit this business can make per year?
