Natural Blends Inc

907 Words Aug 31st, 2008 4 Pages

Here we have 3 processes to consider, the Extraction, Filtration and Concentration.
Extraction has a maximum capacity of 20,000 lbs/hr
Filtration has a maximum capacity of 20,000 lbs/hr
Concentration has a maximum capacity of 18,000 lbs/hr

For Extraction we have a setup time of 20 minutes.
For Filtration we have a setup time of 30 minutes after 90 minutes of filtration.
For Concentration there is no setup time loss.
The processes are simultaneous in nature, and there is no buffer in between. So, if there is a shutdown of a single process, the entire system shuts down.

Now, if we do consider a 2 hour time slot, then there will be effectively production for 1 and ½ hours due to filtration setup time:
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15,000/hr considering a cycle of 2 hrs the maximum production of Extraction is 40,000 lbs and that of Filtration is 30,000. Thus a tank of capacity 5,000lbs can be added between them. But adding tank between Extraction and Filtration will not increase the daily production.
When a storage tank is added between Filtration and Concentration,
Now for 2 hours slot, we see that there is a processing deficit of 3000(30,000-27,000) lbs. So we install storage of capacity 3000lbs.
This will increase the daily production.
Daily production= 30,000x4= 120,000 lbs
Thus there is increase of 12,000lbs/day after adding a storage tank.

3a. Additional fixtures of $20,000 for Filtration process and $10,000 for Extraction should be done to maximize the output.

3b.As discussed in question 2a and 2b the capacity of storage tank, which can be added between Filtration and Concentration should be 3,000lbs. The cost of construction of tank is given as $30/lbs. Hence the total cost for construction of storage tank will be 30 x 3000= $90,000, and the production will increase to 120,000 lbs/day. When additional fixtures are added in Filtration and Extraction process the setup time will reduce by 50% i.e. the setup time for Extraction will be 10 min and that for Filtration will be 15 min.
So our 2 hour cycle will be reduced to 1 hr 45min cycle. So an additional 1 hr will be available for production.