Homework #1 Solution Process Analysis and Capacity Management BUAD311 !

perations Management "all #$11

1. (15 pts) Question 2.1 (page 41 in the textbook) Resource 1 2 ( Activity Time ( in!"nit) 1& ' 1' #umber o$ %orkers 2 1 (

%hat is the )ott*eneck+ %hat is the process capacity+ %hat is the $*o, rate i$ -eman- is eight units per hour+ %hat is uti*i.ation o$ each resource i$ -eman- is eight units per hour+ The capacity o$ resource 1 is ('&!1&)/2012 units per hour. The capacity o$ resource 2 is ('&!')/101& units per hour. The capacity o$ resource ( is ('&!1')/(011.25 units per hour. Resource 2 is the bott*eneck an- the process capacity is 1& units per hour. The $*o, rate ,ou*- be 1 units per hour i$ -eman- rate is 1 units per hour. The uti*i.ation rate o$ resource 1 is 1!120''.23 The uti*i.ation rate o$ resource 2 is 1!1&01&3 The uti*i.ation rate o$ resource ( is 1!11.25021.13 2. (1& pts) A processor makes t,o components4 A an- )4 ,hich are then package- together as the $ina* pro-uct (each pro-uct so*- contains one A an- one )). The processor can -o on*y one component at a time5 either it can make As or it can make )s. There is a setup time ,hen s,itching $rom A to ) (or ) to A). 6urrent p*an are to make 1&& units o$ component A4 then 1&& units o$ component )4 then 1&& units o$ component A4 then 1&& units o$ component )4 an- so $orth4 ,here the setup anrun times $or each component are given be*o,. 6omponent A ) 7etup!6harge over Time 5 minutes 1& minutes Run Time!"nit &.2 minutes &.1 minutes .

Assume the packing o$ the t,o components is tota**y automate- an- is sma** enough that you can ignore it. %hat is the average hour*y output4 in terms o$ the number o$ units o$ packagepro-uct (,hich inc*u-es one component A an- one component ))+ 8t takes 5 9 1&&/&.2 9 1& 9 1&&/&.1 0 45 minutes to make 1&& pro-ucts. The capacity is 1&&!(45!'&) 0 1((.( units per hour. (. (2& points) %e**s :argo has a-opte- *ean phi*osophy $or its -ocument management team that

provi-es paper imaging4 e*ectronic -ocument routing4 -ata *i$ting4 an- -ocument storage services to the ;ome an- 6onsumer :inance -ivision. <ne $unction area o$ the -ocument management team is paper imaging4 ,hich enab*es %e**s :argo to store in$ormation e*ectronica**y. %hen *oan -ocuments arrive4 the papers are $irst prepare-4 then scanne-4 then sent to va*i-ation. 8$ everything is correct4 the packages are reconstructe- an- then *oa-e- to cart $or o$$=site> i$ mistakes are $oun- -uring va*i-ation4 the packages are sent back to the preparation stage to start a** over again. :or each *oan -ocument4 the preparation activity takes 222 secon-s4 ,hi*e the scan4 the va*i-ation4 an- the reconstruction each takes 55 secon-s. 5 emp*oyees are assigne- to the preparation activity4 ,hi*e 1 emp*oyee is assigneto the other three activities. a. ?ra, the process $*o,chart -iagram $or %e**s :argos paper imaging process. Ca*iation #o "se arro,s4 not *ines. 8t is ok to have more -etai*s. b. Assume that a** the -ocuments ,i** pass the va*i-ation stage an- no -ocuments are sent back to the preparation stage4 ,hat is the bott*eneck+ %hat is the hour*y capacity+ The capacity o$ preparation is ('&/'&!222)/50'4.A1 units per hour. The capacity o$ scan is ('&/'&!55)/10'5.45 units per hour. The capacity o$ va*i-ation is ('&/'&!55)/10'5.45 units per hour. The capacity o$ reconstruction is ('&/'&!55)/10'5.45 units per hour. Breparation is the bott*eneck an- the process capacity is '4.A1 units per hour. c. Assume that a** the -ocuments ,i** nee- to be sent back to the preparation stage once anon*y once4 ,hat is the bott*eneck+ %hat is the hour*y capacity+ The capacity o$ preparation is ('&/'&!(222/2))/50(2.4A units per hour. The capacity o$ scan is ('&/'&!(55/2))/10(2.2( units per hour. The capacity o$ va*i-ation is ('&/'&!(55/2))/10(2.2( units per hour. The capacity o$ reconstruction is ('&/'&!55)/10'5.45 units per hour. Breparation is the bott*eneck an- the process capacity is (2.4A units per hour. -. Assume that AA3 o$ the -ocuments ,i** pass the va*i-ation stage an- 13 o$ the -ocuments ,i** nee- to be sent back to the preparation stage once an- on*y once4 ,hat is the bott*eneck+ %hat is the hour*y capacity+ The capacity o$ preparation is ('&/'&!(222/1.&1))/50'4.(4 units per hour. The capacity o$ scan is ('&/'&!(55/1.&1))/10'4.11 units per hour. The capacity o$ va*i-ation is ('&/'&!(55/1.&1))/10'4.11 units per hour. @es

Breparation

7can

Reconstruction

The capacity o$ reconstruction is ('&/'&!55)/10'5.45 units per hour. Breparation is the bott*eneck an- the process capacity is '4.(4 units per hour. 4. (25 pts.) Question 2.' (page 4( in the textbook)

The cases are -ivi-e- into groups D1 ne, customers4 easy. D2 ne, customers4 comp*ex. D( repeat customers4 easy. D4 repeat customers4 comp*ex. #o, that ,e kno, the responsibi*ities out o$ the 5& cases coming in each month4 D1 153 (0 2.5 cases) D2 53 (0 2.5 cases.) D( 5&3 (0 25 cases.) D4 (&3 (0 15 cases) A-ministrative support -oes :i*ing an- %riting> 7enior accountants -o initia* meeting ,ith ne, c*ients an- revie,> Eunior accountant -oes preparation. Droup 1 2 ( 4 :i*ing 2& 4& 2& 4& 8nitia* eeting Breparation 12& (&& 1& 2&& Revie, by senior accountant 2& '& 5 (& %riting 5& 1& (& '&

(& A& #o eeting #o eeting

a. %hich o$ the three persons is the bott*eneck+ )ase- on the -eman- mix4 The time nee-e- $orthe a-ministrative support person is 153/(2&95&)953/(4&91&)95&3/(2&9(&)9(&3/(4&9'&)021.5& minutes per case > The time nee-e- $or the senior accountant is 153/((&92&)953/(A&9'&)95&3/(&95)9(&3/(&9(&)02'.5 minutes per case The time nee-e- $or the Funior accountant is 153/(12&)953/((&&)95&3/(1&)9(&3/(2&&)01(( minutes per case . The Funior accountant is the bott*eneck.

b. %hat is imp*ie- uti*i.ation o$ the senior accountant+ The Eunior accountant+ The a-ministrative support person The imp*ie- uti*i.ation rate o$ A-ministrative support person is 21.5&/5&!(1/2&/'&)0(2.243. 7enior accountant is 2'.5/5&!(1/2&/'&)01(.1&3. Eunior accountant is 1((/5&!(1/2&/'&)0'A.(3. c. @ou have been aske- to ana*y.e ,hich o$ the $our groups is the most pro$itab*e. %hich $actor ,ou*- in$*uence the ans,er to this+ The revenue o$ each pro-uct group ,i** be the most important $actor given that a** the resources have extra capacity. The ,age!cost in$ormation shou*- a*so be presente-. -. ;o, ,ou*- the process capacity o$ C: change i$ a ne, ,or- processing system ,ou*re-uce the time at ,rite the income tax statements by 5& percent+ The Funior accountant is the bott*eneck ,ith a capacity o$ (1/2&/'&)!1((022.2 cases per month. A ne, ,or- processing system ,ou*- not re-uce the time on bott*eneck an- the capacity ,ou*- remain 22.2 cases per month.