The senior management at Diablo Ele

The senior management at Diablo Electronics (see Example 5.2) wants to improve profitability by accepting the right set of orders, and so collected some additional financial data. Variable overhead costs are $8,500 per week. Each worker is paid $18 per hour and is paid for an entire week, regardless of how much the worker is used. Consequently, labor costs are fixed expenses. The plant operates one 8-hour shift per day, or 40 hours each week. Currently, decisions are made using the traditional method, which is to accept as much of the highest contribution margin product as possible (up to the limit of its demand), followed by the next highest contribution margin product, and so on until no more capacity is available. Pedro Rodriguez, the newly hired production supervisor, is knowledgeable about the TOC and bottleneck-based scheduling. He believes that profitability can indeed be improved if bottleneck resources were exploited to determine the product mix. What is the changein profits if, instead of the traditional method used by Diablo Electronics, the bottleneck method advocated by Pedro is used to select the product mix?