Chapter 4

CAPACITY

Exercise 1:

Amy Xia's plant was designed to produce 7,000 hammers per day but is limited to making
6,000 hammers per day because of the time needed to change equipment between styles of
hammers. What is the utilization?

Exercise 2:

For the past month, the plant in exercise 1, which has an effective capacity of 6,500, has
made only 4,500 hammers per day because of material delay, employee absences, and other
problems. What is its efficiency?
Exercise 3:

If a plant has an effective capacity of 6,500 and an efficiency of 88%, what is the actual
(planned) output?

Exercise 4:

A plant has an effective capacity of 900 units per day and produces 800 units per day with
its product mix; what is its efficiency?

Exercise 5:

Material delays have routinely limited production of household sinks to 400 units per day.
If the plant efficiency is 80%, what is the effective capacity?
Exercise 6:

The effective capacity and efficiency for the next quarter at MMU Mfg. in Waco, Texas, for
each of three depart- ments are shown:

Compute the expected production for next quarter for each department
Exercise 7:

T. Smunt Manufacturing Corp. has the process displayed below. The drilling operation
occurs separately from and simultaneously with the sawing and sanding operations. The
product only needs to go through one of the three assembly operations (the assembly
operations are “parallel”).

a) Which operation is the bottleneck?

b) What is the throughput time for the overall system?

c) If the firm operates 8 hours per day, 22 days per month, what is the monthly capacity of
the manufacturing process?
d) Suppose that a second drilling machine is added, and it takes the same time as the
original drilling machine. What is the new bottleneck time of the system?

e) Suppose that a second drilling machine is added, and it takes the same time as the
original drilling machine. What is the new throughput time?
Exercise 8:

The three-station work cell at Pullman Mfg., Inc. is illustrated in figure below. It has two
machines at station 1 in parallel (i.e., the product needs to go through only one of the two
machines before proceeding to station 2)
a) What is the throughput time of this work cell?

b) What is the bottleneck time of this work cell?

c) What is the bottleneck station?

d) If the firm operates 8 hours per day, 6 days per week, what is the weekly capacity of this
work cell?
LOCATION STRATEGIES

Exercise 1:

In Myanmar (formerly Burma), 6 laborers, each making the equivalent of $3 per day, can
produce 40 units per day. In rural China, 10 laborers, each making the equivalent of $2 per
day, can produce 45 units. In Billings, Montana, 2 laborers, each making $60 per day, can
make 100 units. Based on labor costs only, which location would be most economical to
produce the item?
Exercise 2:

Refer to exercise 1. Shipping cost from Myanmar to Denver, Colorado, the final destination,
is $1.50 per unit. Shipping cost from China to Denver is $1 per unit, while the shipping cost
from Billings to Denver is $.25 per unit. Considering both labor and transportation costs,
which is the most favorable production location?
Exercise 3:

Subway, with more than 25,000 outlets in the U.S., is planning for a new restaurant in
Buffalo, New York. Three locations are being considered. The following table gives the
factors for each site
 a) At which site should Subway open the new restaurant?

Conclusion for Part a:

Subway should open the new restaurant at Baptist Church because it has the highest total weighted
score: 69.5.
b) If the weights for Space and Traffic density are reversed, how would this affect the
decision?

Conclusion for Part b:

Even after reversing the weights for Space and Traffic density, the best location remains
Baptist Church, with a new total score of 70.5.

Exercise 4:

Ken Gilbert owns the Knoxville Warriors, a minor league baseball team in Tennessee. He
wishes to move the Warriors south, to either Mobile (Alabama) or Jackson (Mississippi).
The table below gives the factors that Gilbert thinks are important, their weights, and the
scores for Mobile and Jackson.

a) Which site should he select?

b) Jackson just raised its incentive package, and the new score is 75. Why doesn’t this
impact your decision in part (a)?
Exercise 5:

A location analysis for Cook Controls, a small manufacturer of parts for high-technology
cable systems, has been narrowed down to four locations. Cook will need to train assemblers,
testers, and robotics maintainers in local training centers. Lori Cook, thepresident, has asked
each potential site to offer training programs, tax breaks, and other industrial incentives. The
critical factors, their weights, and the ratings for each locationare shown in the following
table. High scores represent favorable values.

a) Compute the composite (weighted average) rating for each location.

b) Which site would you choose? Based on the composite scores, the best site is Carthage, TX.

Exercise 6:

Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open
a new plant. The company is undecided between Detroit and Dallas as the site. The fixed
costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher
because shipping distances would increase. Given the following costs:

a) Perform an analysis of the volume over which each location is preferable.

b) How does your answer change if Dallas’s fixed costs increase by 10%?
Exercise 7:

Prepare a plan to transport gasoline from 4 gas depots to 5 consumption stations with
transportation costs, gasoline reserves at each depot, and gasoline consumption demand at
each station given in the table below so that the total transportation cost is the smallest

Transportation cost (gasoline)

Station 1 Station 2 Station 3 Station 4 Station Reserve (quantity)

Depot 1 60 54 52 18 46 8

Depot 2 26 8 44 6 2 12

Depot 3 6 2 10 8 48 20

Depot 4 32 60 34 20 32 20

Demand (quantity) 14 14 14 14 4
Exercise 8:

Joint Stock Company A needs to transport fertilizers in 3 warehouses Thu Duc, Binh
Tan, Binh Thanh to four fertilizer agents in Quang Nam, Quang Ngai, Binh Dinh, Phu
Yen. Thu Duc warehouse provides a maximum of 10 tons of fertilizer, Binh Tan
warehouse provides a maximum of 30 tons of fertilizer, Binh Thanh warehouse provides

a maximum of 20 tons of fertilizer. The order in Quang Nam is 5 tons, Quang Ngai 20
tons, Binh Dinh 10 tons, Phu Yen 25 tons.

Quang Nam Quang Ngai Binh Dinh Phu Yen

Thu Duc 1 1 3 5

Binh Tan 3 2 4 3

Binh Thanh 2 1 1 2
The company needs to plan the transportation of fertilizers from warehouses to agents in a
way that meets the order needs of agents with the lowest total transportation cost.
LAYOUT STRATEGIES.

Exercise 1:

Aero Maintenance is a small aircraft engine maintenance facility located in Wichita, Kansas.
Its new administrator, Ann Daniel, decides to improve material flow in the facility, using the
process layout method she studied at Wichita State University. The current layout of Aero
Maintenance's eight departments is shown in figure below.

The only physical restriction perceived by Daniel is the need to keep the entrance in its
current location. All other depart- ments can be moved to a different work area (each 10 feet
square) if layout analysis indicates a move would be beneficial.

First, Daniel analyzes records to determine the number of material movements among
departments in an average month. These data are shown in figure below. Her objective,
Daniel decides, is to lay out the departments so as to minimize the total movement (distance
traveled) of material in the facility.
 Final Answer:
The current total movement cost is 420. To improve the layout:
 Place Receiving (2) near Entrance (1) and Parts (3).
 Move Breakdown (5) closer to Assembly (6) and Inspection (7).
Exercise 2:

The assembly line whose activities are shown in figure below has an 8-minute cycle time.
Draw the precedence graph, and find the minimum possible number of one-person
workstations. Then arrange the work activities into workstations so as to balance the line.
What is the efficiency of your line balance?

Precedence Graph Explanation

The graph clearly shows the sequence of tasks and their dependencies:
 A is the starting task with no predecessors.
 B follows A.
 C and D depend on B.
 E and F depend on C.
 G depends on D, E, and F.
 H depends on G.
This visual representation helps to arrange the tasks efficiently into workstations while
respecting precedence constraints. Let me know if you need further clarifications or
adjustments
Task A has no dependencies and is performed first.
Task B follows A.
Tasks C and D follow B.
Tasks E and F follow C.
Task G follows D, E, and F.
Task H follows G.

3. Assign Tasks to Workstations

Rules for Task Assignment:
1. Prioritize tasks with the largest task time.
2. Follow the precedence rules.
3. Do not exceed the cycle time of 8 minutes per workstation.
Task Assignment:
 Workstation 1:
o Task A (5 min)
 o Task B (3 min)
o Total Time = 5+3=8 minutes
 Workstation 2:
o Task C (4 min)
o Task D (3 min)
o Total Time = 4+3=7 minutes
 Workstation 3:
o Task E (6 min)
o Task F (1 min)
o Total Time = 6+1=7 minutes
 Workstation 4:
o Task G (4 min)
o Task H (2 min)
o Total Time = 4+2=6 minutes
Exercise 3:

Stanford Rosenberg Computing wants to establish an assembly line for producing a new product,
the Personal Digital Assistant (PDA). The tasks, task times, and immediate predecessors
Rosenberg’s goal is to produce 180 PDAs per hour.
a) What is the cycle time?

b) What is the theoretical minimum for the number of workstations that Rosenberg can
achieve in this assembly line?
c) Can the theoretical minimum actually be reached when workstations are assigned?
for the tasks are as follows:
Yes, the theoretical minimum of 3 workstations can be achieved.
Exercise 4:

Sue Helms Appliances wants to establish an assembly line to manufacture its new product,
the Micro Popcorn Popper. The goal is to produce five poppers per hour. The tasks, task
times, and immediate predecessors for producing one Micro Popcorn Popper are as follows:

a) What is the theoretical minimum for the smallest number of workstations that Helms

can achieve in this assembly line?

b) Graph the assembly line, and assign workers to workstations. Can you assign them with
the theoretical minimum?
All workstations respect the 12-minute cycle time.

c) What is the efficiency of your assignment?

Conclusion for Part c:
The line balance achieves 100% efficiency because the total task time is perfectly balanced across
4 workstations, and each workstation utilizes the full cycle time of 12 minutes.

Exercise 5:

The Action Toy Company has decided to manufacture a new train set, the production of which is
broken into six steps. The demand for the train is 4,800 units per 40-hour workweek:

TASK PERFORMANCE TIME (sec) PREDECESSORS

 A 20 None
B 30 A
C 15 A
D 15 A
E 10 B, C
F 30 D, E

a. Draw a precedence diagram of this operation.

Explanation of the Precedence Diagram

The diagram shows:
 A is the starting task.
 Tasks B, C, and D follow A.
 Task E depends on B and C.
 Task F depends on D and E.
b. Given the demand, what is the cycle time for this operation?

c. What is the theoretical minimum number of workstations?

d. Assign tasks to workstations.

e. How much total idle time is present each cycle?

f. What is the efficiency of the assembly line with five stations? With six stations?