Removing bottlenecks in operations (Goldratt)

Fruit Juicers Inc. produces three types of juicers: the basic model Fruit Juice (F) and two more advanced types: Sunshine (S) and Cool Night (C). The basic model is produced in two manufacturing processes: Production and Assemble. The other two products also pass through these two processes, but they require different methods of production and, therefore, consume different numbers of hours in each of the two processes. When S leaves the second process it goes through the final process Finishing 1. When C leaves the Assemble process, it goes through the final process Finishing 2. Both finishing processes are technically distinct and thus the number of production hours per unit is also different.

The standard product Fruit Juice requires 1.6 hour in Production and 2 hours in Assemble.

Sunshine needs 2 production hours in Production, 1 in Assemble and 4 in Finishing 1. And finally, Cool Night starts with 1 hour in Production, 3 in Assemble and 2 in Finishing 2.

Total capacity of Production is 10 000 hours, of Assemble 15 000 hours, Finishing 1 is 12 500 and Finishing 2 is 8200.

Management of Fruit Juices has launched a new sales plan for the coming year in which the projected sales numbers are 2500 units of Fruit Juice, 3000 units of Sunshine, and 3500 units of Cool Night.

Required:

1. Use the TOC approach to identify the bottlenecks in Fruit Juicer’s production process.

2. Follow TOC’s incremental approach to accommodate the installed capacity to the projected sales numbers in the sales plan. What steps need to be taken to adjust the capacity to the plan?

3. A competitor in the upscale market has been withdrawn from the market. This leads to an additional sales volume for Sunshine, which will be increased from 3000 to 4000 units. The company is willing to invest in expansion of the production capacity in order to produce the required number of products. How much additional investment is needed?