A Chemical industry is unable to satisfy customer demand for one of its products. The various departments with capacity and precedence are shown in Table 2-1. The ratios for mixing the outputs from processes B, C and D are 2, 2 and 1 respectively. The ratio for departments F and G is 1 to 1 and the ratio for departments H and I is 4 to 1. Calculate the following: (i) The system capacity; (ii) Determine which department is the bottleneck; (iii) How much system capacity can be gained by adding capacity to the bottleneck? Department A B C D E F G H I J Table 2-1 Capacity (liters/Hour) 300 250 250 250 600 550 600 1100 300 1200 Precedence A B,C & D E F & G H & I
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- A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product AnnualDemand A B C 1 16,000 3 4 4 2 10,000 6 5 1 3 15,000 1 3 6 4 17,000 5 3 4 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 240 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number. Omit the "$" sign.) Total…An airline company must plan its fleet capacity and its long-term schedule of aircraft usage. For one flight segment, theaverage number of customers per day is 70, which represents a 65 percent utilization rate of the equipment assigned to theflight segment. If demand is expected to increase to 84 cus-tomers for this flight segment in three years, what capacityrequirement should be planned? Assume that managementdeems that a capacity cushion of 25 percent is appropriateThe effective capacity and efficiency for the next quarter at MMU Mfg. in Waco, Texas, for each of three departments are shown: Compute the expected production for next quarter for each department.
- Effective capacity is: Multiple Choice a. also called theoretical capacity. b. base capacity plus time for maintenance, breaks, and absenteeism. c. the amount of capacity that can be used in planning for actual output. d. All of these choices are correct.In a job shop, effective capacity is only 43 percent of design capacity, and actual output is 71 percent of effective output. What design capacity would be needed to achieve an actual output of 11 jobs per week? What is its effective capacity?a. The Design Capacity needed to achieve the required actual job outputs = (round to whole number)b. The Effective Capacity needed to achieve the required actual job outputs = (round to whole number)A small firm intends to increase the capacity of a bottleneck operation for producing a product by adding a new machine. Two alternatives, A and B, have been identified and the associated costs and revenues have been estimated. Annual fixed costs would be $30000 for A and $25,000 for B; variable costs per unit would be $10 for A and $12 for B; and the revenue per unit would be $25. i. Find the total cost functions for alternatives A and B, and the revenue function ii. Draw both the total cost functions and the revenue function in the same figure. iii. Find the break-even point for the alternatives A and B and show it in the figure iv. Is there any volume of output at which both the alternatives yield the same profit? If so, show it in the figure. If not, identify the volume of output at which the alternatives are indifferent
- A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.a. Determine the break-even point for each range.b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?Mariah Enterprises makes a variety of consumer electronicproducts. Its camera manufacturing plant is consideringchoosing between two different processes, named Alphaand Beta, which can be used to make two component partsA and B. To make the correct decision, the managers wouldlike to compare the labor and multifactor productivity ofprocess Alpha with that of process Beta. The value of processoutput for component A and B are $175 and $140 per unit,respectively. The corresponding overhead costs are $6,000and $5,000, respectively Process Alpha Process BetaProduct A B A BOutput (units) 50 60 30 80Labor ($) $1,200 $1,400 $1,000 $2,000Material ($) $2,500 $3,000 $1,400 $3,500a. Which process, Alpha or Beta, is more productive?b. What conclusions can you draw from your analysis?Green Grass’s plant manager just received marketing’s latest forecasts of Big Broadcaster sales for the nextyear. She wants its production line to be designed to make 2,400 spreaders per week for at least the nextthree months. The plant will operate 40 hours per week.a. What should be the line’s cycle time?b. What is the smallest number of workstations that she could hope for in designing the line for thiscycle time?c. Suppose that she finds a solution that requires only five stations. What would be the line’s efficiency?
- A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product AnnualDemand A B C 1 16,000 3 4 4 2 10,000 6 5 1 3 15,000 1 3 6 4 17,000 5 3 4 Click here for the Excel Data File a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 240 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole…Avis Company is a car rental company that is located three miles from the Los Angeles airport (LAX). Avis is dispatching a bus from its offices to the airport every 2 minutes. The average traveling time (round-trip) is 20 minutes.a. How many Avis buses are traveling to and from the airport?b. The branch manager wants to improve the service and suggests dispatching buses every 0.5 minutes. She argues that this will reduce the average traveling time from the airport to the Avis offices to 2.5 minutes. Is she correct? If your answer is negative, what will the average traveling time be?Explain and expand these importance of capacity planning. 1. Capacity decisions have a real impact on the ability of the organization to meet future demands for products and services. 2. Capacity decisions affect operating costs. 3. Capacity is usually a major determinant of initial cost. Typically, the greater the capacity of a productive unit, the greater its cost.