OPERATIONS AND SUPPLY CHAIN MANAGEMENT
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
9th Edition
ISBN: 9781119448037
Author: Russell
Publisher: WILEY
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Chapter 5, Problem 21P
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To explain: Determine if the company should add extra workers to reduce the processing time from the current 1.2 minutes to 0.90 minutes per unit. The current cost is $31 per unit per day and the faster process will cost $52 per day per unit.

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Partially completed products arrive at a workstation in a manufacturing operation at a mean rate of 40 per hour (Poisson distributed). The processing time at the workstation averages 1.2 minutes per unit (exponentially distributed). The manufacturing company estimates that each unit of work-inprocess inventory at the workstation costs $31 per day (on average). However, the company can add extra employees and reduce the processing time to 0.90 minute per unit, at a cost of $52 per day. Determine whether the company should continue the present operation or add extra employees.
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OPERATIONS AND SUPPLY CHAIN MANAGEMENT

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