HW-7_Review_OM235_Fa23_2023-09-29b

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Dec 6, 2023

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OM 235 Homework-7 Fall 2023 Please place each of your answers inside the rectangular box that is next to each question. Each question is worth one point unless otherwise indicated. There are 24 possible points total. (Revised: Sept. 29, 2023.) Name: Question 1 . Review on process analysis Westlake Custom Car Detail (WCCD) provides detailing (intensive car cleaning) services to antique and collector cars. Taddeo D’Andrea, the owner of the establishment has an online webpage which schedules appointments for car owners so that the arrival rate of cars at WCCD never exceeds its process capacity, (i.e. it’s run as a just-in-time process). Taddeo has asked you, as a fellow UT BBA alum, to take a look at his process and make recommendations about how to improve it. During the process, Taddeo greets the clients, asks for some background information, and then directs the car to one of the detailers. The client is sent to a waiting room while the bill is prepared by Caterina. Taddeo then collects the payment himself. After both the payment is collected and the detailing completed, Maria guides the client to the car and says goodbye. The first thing you do is document the process flow with a process flow diagram, which is shown below. The next thing you do is perform analysis of the common operations metrics as shown in the sub- problems below. Note that each client brings exactly one car to WCCD, and that 3 clients arrive per hour on average. 1
(a) What is the Rush Order Flow time of the process above in minutes? 10+45+5=60 (b) What is the process capacity in clients/hour? 60*(1/16)= 3.75 clients/hour (c) What is the process flow rate (throughput) in clients per hour? Demand is lower than capacity (d) If there is an average of 11 cars at WCCD at any one time, what is the average amount of time a car spends at WCCD in hours? I = r*t 11 = 3 * t (e) What is the labor utilization for Giorgio, Carlo, and Guido in percent? 3/45 min = 15 min 3 clients/hour/4 clients/hour (f) What is the utilization of Taddeo? 16 min/client 3 clients/hour/3.75 clients/hour 2 60 3.75 clients/hour 3 clients/hour 3.67 hours 75% 80%
Question 2 . Review on financials Continuing with Westlake Custom Car Detail, you examine its financials. (a) If clients pay $60/vehicle for detailing, each employee costs $20 per hour, and materials (soap, wax, etc.) cost $10/vehicle, what is the profit of WCCD in dollars per hour? Note that employees cannot be fired, so they are a fixed cost. (60-10)*3-120=30 dollars/hour (b) What is WCCD’s operating leverage? (60-10)/((60-10)+40) = 50/90 = .556 (c) What is WCCD’s breakeven volume in clients per hour? X= 2.4 0 = 50x-120 (d) Across town WCCD’s competitor, Lake Travis Custom Detailing offers the same product, but uses a different process? Its operating leverage is 3.0. If it can draw enough clients away from WCCD to raise Lake Travis’s own throughput by 5%, what would the percentage increase in Lake Travis’s profit be? 3*5 = 15 3 $30/hr .556 2.4 clients/hour 15%
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